Electronic real estate bartering system

ABSTRACT

A real estate bartering system implements barters between a plurality of parties each having one or more classes of items available for barter. Preferably, barter orders are created by designating a selected quantity of a first class of items to be bartered, designating a date range for transferring title of the first class items to be bartered, designating a barter value of the first class of items to be bartered, and designating a second class of items to be acquired. Barter orders are posted via the Internet to a barter database and may be displayed via the Internet. Posted barter orders whose first class of items match the second class of items of a barterer&#39;s order are preferably displayed. Posted barter orders from the display are selected to effectuate a barter transaction which combines a barterer&#39;s barter order with the selected posted order(s).

BACKGROUND

The present invention relates to a computer-based website for bartering,exchanging or selling, (hereinafter referred to as bartering), realestate items or securities including, but not limited to, real property,stock, cash (foreign or domestic currencies), web barter dollars(defined below), Himmelstein Options (defined below), CD's, bonds,notes, Option Put, Option Call, Commodities/Futures, Annuities, MuniBond(s), Government Bonds, Funds, Strips (Zero Coupon Treasuries),Ginnie Mae(s), Fannie Mae(s), Freddie Mac(s), UIT (Unit InvestmentTrust), T-bills and any future created or defined security, commodity orcommodity money wherein a barter order indicating the item to barter andthe desired barter item are matched by the website. Barter transactionsare made which combine a barterer's barter order with a matching orderor combination of orders which the barterer selects or the barterer hasautomatically selected by the website. All barter transactionsincorporate agreements. Agreements, termed Himmelstein Options, permitbarterers to agree to a future range of dates: a date after the bartertransaction may occur and a date before the barter transaction mustoccur or the rights of ownership may expire. Himmelstein options alsoinclude other conditions or parameters in the agreement as well.

Automated computer systems matching buy and sell orders for tradingstocks, futures and other properties are well known in the art. Anexample of such a system is disclosed in U.S. Pat. No. 3,573,747 toAdams, et al., which discloses a system for matching buy and sell ordersfor fungible properties between traders. After the initial match, oneembodiment of this system allows traders to negotiate other terms of thetransaction while all traders are continuously appraised of thenegotiation status. The system disclosed in U.S. Pat. No. 4,412,287 toBraddock relates to trading stock and discloses a central computer thatmatches buy and sell orders from a plurality of user terminals. In U.S.Pat. No. 5,689,652 to Lupien, et al. a computer network with a pluralityof trader terminals matches buy and sell orders incorporating asatisfaction density profile. The density profile provides a measure formaximizing the mutual satisfaction of all traders.

Computer systems to match bids and offers are also well known in theart. The system disclosed in U.S. Pat. No. 4,903,201 to Wagner matchesbids and offers for future commodity contracts and detects illegal tradepractices. U.S. Pat. No. 5,727,165 to Ordish, et al., discloses anetwork system and further provides confirmation timing and notificationmessaging to the traders. In U.S. Pat. No. 5,924,082 to Silverman, etal., a negotiated matching system matches bids and offers based on acriteria that includes “ranking” data. The ranking data is comprised ofcredit and risk information to facilitate the best matches with respectto risk management. Another aspect of this same system permits tradersto negotiate directly with each other prior to or after an initial matchis made by the system. The system of U.S. Pat. No. 5,926,801 toMatsubara et al. also matches bids and offers, and in one embodiment,credit criteria is considered in the match.

Another computer system disclosed in U.S. Pat. No. 5,873,071 toFerstenberg, et al. includes an intermediary computer program and anelectronic agent computer program which can operate over the Internet.The intermediary computer program mediates offers and counter-offers forfinancial commodities. Goals, expressed as either a set of computerrules or as an objective with constraints, are set by the participantsand the electronic agent computer program generates counter-offersaccording to the goals in response to offers from the intermediarycomputer program. In one embodiment of the system, a calculated“fairness measure” is used to determine satisfaction of the participantsgoals.

None of these patents address a bartering, exchanging or selling systemwhereby an individual trader constructs a barter order by establishingtrading parameters that include an item to be bartered and a desireditem to be received. Additionally, since each of the prior art systemsare tailored to a particular market or type of security, they areextremely limited. These systems do not permit flexibility in tradingone type of security for another type, or even one type of security forreal property.

SUMMARY

The present invention is a barter system utilizing a computer systemlinked to a website to effectuate a tax deferred exchange for barteritems including real estate property, real estate leases and all typesof securities. A tax deferred exchange permits a property owner to tradeone property for another without having to pay federal income tax on thetransaction. Tax deferred exchanges are authorized by Section 1031 ofthe IRS code. This system meets the requirements of Section 1031 andother sections of the IRS code to ensure that an exchange is doneproperly so the tax on the transaction may be deferred.

The system is accessed directly at a website called“eBarterRealestate.com.” The system assists an individual with settingup a new account, including information regarding the property they wantto exchange. The information could be downloaded from real estatewebsites or real estate offices if an individual had previously providedthe pertinent information to a real estate agent. The system allows theindividual to enter information about their property, (including videos,pictures, asking price), and display various other types of informationsuch as real estate taxes, assessment, equalization value (ifapplicable), appraised value etc. This information would be posted forothers to look at and evaluate. If there is a “boot” (i.e. excess funds)left over, the system can hold funds in escrow, return excess funds,donate the funds to a preselected charity or allow individuals to barterfor other property or a portion of an existing property.

The present invention permits bartering of items or securities includingbut not limited to real estate, stock, cash (foreign or domesticcurrencies), web barter dollars, Himmelstein Options, CD's, bonds,notes, Option Put, Option Call, Commodities/Futures, Annuities, MuniBond(s), Government Bonds, Funds, Strips (Zero Coupon Treasuries),Ginnie Mae(s), Fannie Mae(s), Freddie Mac(s), UIT (Unit InvestmentTrust), T-bills and any future created or defined security, commodity orcommodity money. A Himmelstein Option is an agreement to barter items orsecurities with specific conditions for a settlement date (i.e. rightsto acquire) to occur after a specified date and before a specified date.These dates may be the same. The before date may be indefinite.Himmelstein's Options (i.e. the portion of the barter transaction thatis to be acquired) may be sold for cash or bartered (i.e. assign theirrights or transfer their rights for a different security). In otherwords, the Himmelstein Option agreement, once acquired may be assignedwithout the written consent of the issuer/creator. This means thatacquirer may transfer his rights to acquire the security or other itemwhich is the subject of a Himmelstein Option to someone else.

The user, termed the barterer, creates a barter order that is postedand/or matched against a website database of other posted barter orders.To implement a barter, the barterer selects a posted barter order from adisplay of matching barter orders. Barter orders include minimumcriteria such as an identification of items to be bartered, anidentification of items desired, market value of the items to bebartered and value determined by the barterer. Criteria such as theHimmelstein Option having barter date ranges (i.e. date upon which theactual ownership of the barter items changes hands) and value ranges addto the flexibility of the system. The flexibility in timing utilizingthe Himmelstein Option facilitates the ability to potentially deferadverse tax consequences and to defer the creation of taxable events.

It an object of this invention to provide a flexible barter system whichallows ownership acquisition deferral and the matching of multi-orderbarter transactions. Other objects and advantages will become apparentafter reviewing a detailed description of a presently preferredembodiment of the invention.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a diagram of a bartering system in accordance with theteachings of the present invention.

FIG. 2 is a schematic diagram of the structure of an example barterdatabase and barter order in accordance with the teachings of thepresent invention.

FIG. 3 is a schematic diagram of a multi-order barter transaction inaccordance with the teachings of the present invention.

FIGS. 4A-4E are flowcharts of a typical barter ordering session andbarter transaction in accordance with the teachings of the presentinvention.

FIGS. 5A-5F are portions of screen displays illustrating the creation ofa sample barter order in accordance with the teachings of the presentinvention.

FIG. 6 is an example of a barter transaction screen in accordance withthe teachings of the present invention.

FIGS. 7A-7E are schematic illustrations of several different types ofbarter transactions which may be implemented according to the teachingsof the present invention.

FIG. 8 is a schematic diagram of the components of a barter postingmodule in accordance with the teachings of the present invention.

FIGS. 9A and 9B are tables illustrating general and specific parametersfor classes of barter items that are preferably utilized in a bartersystem made using a Himmelstein Option in accordance with the teachingsof the present invention. Specifically, the “barter/settlement date,open/close” column in the tables is a condition or parameter included inthe Himmelstein Option.

FIG. 10 is a bartering system in accordance with an alternativeembodiment of the present invention.

FIGS. 11AA, 11AB, 11BA and 11BB are tables illustrating general andspecific parameters for classes of barter items that are preferablyutilized in a barter system in accordance with the alternativeembodiment.

FIG. 11C is a table of parameters for a real estate transaction.

FIG. 12A is an example barter database.

FIG. 12B is an example barter order.

FIG. 13 is a schematic diagram of a multi-order barter transaction inaccordance with the teachings of the alternative embodiment of thepresent invention.

FIGS. 14A-14E are flowcharts of a typical barter ordering session andbarter transaction in accordance with the teachings of the alternativeembodiment of the present invention.

FIGS. 15A-15F are portions of screen displays illustrating the creationof a sample barter order in accordance with the teachings of thealternative embodiment of the present invention.

FIG. 16 is an example of a barter transaction screen in accordance withthe teachings of the alternative embodiment of the present invention.

FIGS. 17A-17D are schematic illustrations of several different types ofbarter transactions which may be implemented according to the teachingsof the alternative embodiment of the present invention.

FIG. 18 is a schematic diagram of the components of a barter postingmodule in accordance with the teachings of the alternative embodiment ofthe present invention.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

The preferred embodiment of the present invention will be described withreference to the drawings where like numerals represent like elementsthroughout.

The Himmelstein Option is a new type of financial interest being createdby the present invention. Utilizing Himmelstein Option(s) allows thepresent invention to create a new type of market (“virtual market”),whereby barters may own and/or barter Himmelstein Options forHimmelstein Options, indefinitely, without having to possibly incurordinary or capital gains taxes. Furthermore, as long as the individualwho owns a Himmelstein Option or is in the possession of a HimmelsteinOption does not go to settlement and “take title”, the actual owner ofthe security defers a taxable event.

The system creates web barter dollars to further its ability tofacilitate a virtual market. Web barter dollars are the system'scurrency with a unit (commodity dollar) which is preferably set to equalthe U.S. dollar or some other standard such as foreign currency, goldetc. The system, for example, uses web barter dollars to track an “I oweyou” (“IOU”) to individuals giving up a security but not simultaneouslyreceiving a security back. Preferably, the system uses web barterdollars to supplement or balance a barter in lieu of other currenciessuch as the U.S. dollar. Using web barter dollars or cash simplifies thematching of barter orders where items of unequal value are traded.

When converting IOUs or web barter dollars to a different security, thesystem may charge a different fee based on the age of the IOUs. Forinstance, if the IOU is to be held longer, the system may charge a lowerpercentage or lower fee to convert to U.S. dollars. Further, the systemmay charge a different fee or a different percentage based on therelationship with a particular individual requesting the conversion. Thesystem and barterers may barter web barter dollars for cash at differentvalues. For example, the system may charge a fee to convert from webbarter dollars to cash, but as an incentive provide extra web barterdollars for cash. Should there ever be a need to have the systemredefine or modify its definition for IOUs or web barter dollars, thesystem reserves the right (in the Agreement(s)) and can do so. Forexample, the system may change IOU's or web barter dollars to systemfunds which are portable and permit a barterer to transfer shares ofsystem funds to specific institutions without having to redeem sharesand possibly incur a taxable event. Accordingly, those skilled in theart should recognize that the system can be configured to perform any,and all stock market, banking and financial institution functions.

Referring to FIG. 1, an exemplary barter system 100 is illustrated whichutilizes a computer-based website that may effectuate a tax-freeexchange or tax deferred exchange for swapping barter items. Barteritems are defined including, but not limited to, stock, cash (foreign ordomestic currencies), web barter dollars, Himmelstein Options, CD's,bonds, notes, Option Put, Option Call, Commodities/Futures, Annuities,Muni Bond(s), Government Bonds, Funds, Strips (Zero Coupon Treasuries),Ginnie Mae(s), Fannie Mae(s), Freddie Mac(s), UIT (Unit InvestmentTrust), T-bills and any future created or defined security, commodity orcommodity money. Bartering different categories of items is supported bythe system 100. For example, stocks can be bartered for bonds. Thesystem 100 provides for its own “web-barter dollars” which may beaccumulated or traded by barters using the system 100 and areparticularly useful in facilitating barters where items of unequal valueare traded.

The system 100 preferably includes a barter website 106 which isaccessed via an investing company website 102, or directly via theInternet using a computer such as a personal computer 114 or a wirelesshand-held computer with Internet connectivity 110. Optionally, thesystem 100 may be incorporated as part of an existing investingcompany's website.

In the case of access via an investing company website 102, the bartereruses a computer such as a personal computer 108, a portable computer 116or a wireless hand-held computer with Internet capability 112 to selecta “Barter” icon 103 that incorporates a link 104 to the barter website106. Once the icon is selected, the trader's investing company accountinformation is transferred via a link 104 to the barter website 106. Inthis manner, the barter website 106 is produced with all of the relevantparticulars of each item owned by the individual trader. For example, inthe case of bonds, the website 106 preferably includes the entity thatissued bonds, amount of bonds, market value, interest date and due datedata. In the case of stocks, the barter website 106 preferably includesdata indicating company, number of shares, market value and whetherdividends are reinvested. Using the link 104, the barter website 106 istransparent to a barterer accessing it via the investing company website102.

The system 100 can be further interfaced with traditional brokers sotraditional brokers and clients without the resources to go directly“online” can barter in the same manner.

While the barter system 100 supports bartering different categories ofitems such as stocks, Himmelstein Options for stocks, notes, HimmelsteinOptions for notes, bonds, and Himmelstein Options for bonds, an onlineinvesting company hosting the “Barter” icon 103 can limit barters tocertain categories of items. For example, an investment company websitethat provides online stock trading may chose to limit the barter website106 to only stock and/or Himmelstein Options for stock and/orHimmelstein Option barters. This allows someone (a barterer) to acquirea Himmelstein Option which is, in this case, the right to own stock at afuture date which allows the other barterer the ability to delay ordefer the taxable event. This is accomplished by setting an appropriatefilter so that only stock and/or Himmelstein Option is identified in thebarter orders. Preferably, such a filter also allows use of web-barterdollars and/or cash which enables a wider range of barter orders to bematched and barter transactions to be completed.

Regardless of the items bartered, the barter website 106 comprises threemain components: a barter ordering module 105, a posted barter orderdatabase module 117 and a barter matching engine 118. Optionally, thesystem 100 may include a separate database (not shown) of eachindividual's portfolio for all securities. In general, the barterordering module 105 permits a trader, herein referred to as thebarterer, to create a barter order that includes the item to be traded,the item desired and additional parameters related to the barter order.

The table set forth in FIG. 9A reflects typical parameters associatedwith various classes of items or securities to be identified in a barterorder. In each barter order, the appropriate parameters are identifiedfor both the item to be traded and the item to be acquired so that thebarter order comprises two sets of item parameters. The two sets ofparameters may be quite different where the two items which are thesubject of the barter order are of a different class or type.

Each portfolio item, regardless of type or classes, can be transformedinto a Himmelstein Option agreement by defining a future date or rangeof dates for settlement using the last column in the table FIG. 9A. TheHimmelstein Option is posted for immediate barter, but is subject to thespecific settlement date or range identified.

A Himmelstein Option permits a security to go “under agreement” with aspecific future closing date, (similar to a purchase of real estate).Presently, the IRS does not treat this as a taxable event at the time ofthe agreement. An individual who owns a Himmelstein Option may barter itagain (with the same or different terms as the original agreement)without having settlement and obtaining ownership of the underlyingsecurity. Obviously, “different terms” are limited to a subset of termsof the original Himmelstein Option agreement that was issued.

The “standard” Himmelstein Option requires that the individual acquiringthe Himmelstein Option must put up the full amount of the desiredsecurity at that time, (i.e. and nothing at settlement). If the desiredsecurity is also a Himmelstein Option, providing the rights to acquireor transferring the rights meets this requirement. It should be notedthat each Himmelstein option may have different future dates forsettlement. The IRS may attempt to claim that this constitutes aderivative. However, if an individual is bartering away a security andbarters for a security, on future dates utilizing Himmelstein Options,they are receiving a derivative and giving away a derivative.Consequently, in most cases, these derivatives in essence, “cancel out.”The system 100 may further require that the barterers agree on the valuefor the Himmelstein Option should the IRS consider it a derivative.Preferably, the system sets the “barter value” as the default agreedupon value.

The person who issues a Himmelstein Option or barters an acquiredHimmelstein Option chooses the future date or range of dates forsettlement and value which must be accepted by the acquirer. If therewas a future range of dates given for settlement, it is the choice ofthe person acquiring the Himmelstein Option to go to settlement withinthe specified range. The “standard” Himmelstein Option automaticallygoes to settlement on the final day should the person acquiring theHimmelstein Option not choose a date. The system 100 may charge anadditional fee for the actual settlement.

When an individual creates a barter order for any security, the system100 produces an Agreement of Barter, Exchange or Sale (i.e. terms andconditions). Barterers, in essence, fill in the “blanks” of theAgreement of Barter, Exchange or Sale. The system 100 may also requireelectronic signatures to accompany the Agreement or may create aparallel Agreement for each barterer for simplicity and anonymitypurposes. The Agreement is also with the system 100, providing variousconditions or rights that the system 100, intermediary or designatedagent(s) has with the barterer.

At settlement, title to the security or financial interest which is thesubject of the Himmelstein Option is transferred. For stock, forexample, settlement may require the actual transference of StockCertificates. Preferably the traded stocks are not in paper certificateform so that a book entry of the stock transfer may be made to transfertitle.

Once bartered, a Himmelstein Option cannot be canceled by its creator.Himmelstein Options may continually be bartered without being requiredto have settlement. Examples of a Himmelstein Option with appropriateparameters for each of nine different classes/types of items are setforth in the table of FIG. 9B. Similar to FIG. 9A, in FIG. 9B each rowshows one of the items of a barter order, i.e. an item to be bartered oran item to be acquired. A Himmelstein Option may be identified as a “tobe bartered item” and actual stock may be identified as a “to beacquired item” in a given complete barter order. A Himmelstein Optionmay be acquired via the barter system as soon as it is posted, but theactual ownership of the financial interest which is the subject of theoption is not transferred to the acquiring party until the acquiringparty exercises the Himmelstein Option during the settlement period.

When the barterer creates a barter order, the system 100 creates anorder number referencing the barter order. The system 100 may randomlycreate or code barter order numbers so only the system 100 is aware ofthe age of a barter order and the identity of the barterer. The postedbarter order database module 116 accumulates posted barter orders andincludes the software to add, delete and maintain the data in thedatabase. The barter matching engine 118 selectively matches abarterer's barter order with posted barter orders in the database 116.Posted barter orders “matching” a barterer's order are displayed suchthat the barterer can select a candidate or candidates from thedisplayed listing of matching posted orders. The matching processfunctionally operates as a filter to display posted orders matching aselected criteria. Preferably, the filter is set to match the barterer'sselected item to be acquired with posted orders having the same item tobe bartered. The quantity of the selected item may also be used forfiltering to require a direct quantity match or a match within aquantity range. The barterer's selected item to be bartered is also apreferred criteria for the matching filter, so that postings aredisplayed of barter orders which seek to acquire the item selected to bebartered by the barterer. A preferred filter includes both thebarterer's selected item to be bartered and selected item to beacquired. Optionally, the filter may allow both specific items of aclass as well as Himmelstein Options for the specific items. Thus, wherea barterer's desired item is IBM stock, posted barter orders seeking tobarter away IBM stock or Himmelstein Options for IBM stock are displayedas matches.

The barter matching engine 118 is configurable to either match one“best” posted order or multiple posted orders with a barterer's order.The barter engine 118 can also be configured to use the barter website(or an entity chosen by the website) as an intermediary as explained ingreater detail below.

FIG. 2 illustrates a typical stock and/or Himmelstein Option for stockand/or Himmelstein Option barter transaction involving sample postedbarter orders 204-224 stored in a database 216 of module 116 and asample barterer's barter order 226. In this example, the barter orderincludes the stock to be bartered indicated by stock symbol 228, thequantity 230 of the stock to be bartered, the value 232 at which thebarterer is willing to barter, the desired stock 234 indicated by stocksymbol, the value 236 the barterer is willing to barter for the desiredstock, and an “*” indicating the ownership of the Himmelstein Option forthe stock instead of ownership of the stock itself. Preferably, thesettlement date(s) are displayed for all Himmelstein Options. The stockvalues of a barter order need not be a fixed value. For example, valuesidentified for several of the posted barter orders 204, 208, 212,218-224 are based on the current market price of at least one of therespective stocks. Barterer order 226 indicates that the barterer has 45shares 230 of Dupont stock (stock symbol DD) 228 which the barterer iswilling to trade at a value of $20 per share 232 for Aetna stock (stocksymbol AET) 234 at a value of $90 per share 236. If the matchingcriteria is set to match only the barterer's acquire item selection(including Himmelstein Options for the item), orders 204, 206, 208 aredisplayed. If the matching criteria is set to match only the barterer'sbarter item selection (including Himmelstein Options for the item),orders 206, 208, 216 are displayed. If the matching criteria is set tomatch either the barterer's barter or acquire item selection (includingHimmelstein Options for the item), orders 204, 206, 208, 216 aredisplayed. If the matching criteria is set to match both the barterer'sbarter and acquire item selections (including Himmelstein Options forthe item), orders 206 and 208 are displayed. An order combining orders204 and 216 may also be displayed in that situation.

Other criteria such as market value and the other parameters identifiedin FIGS. 9A and 9B for each barter item may be displayed and used formatching. For example, where barter value is required to be matched, ifthe market value of Dupont stock is $20 per share, the barter engine 118matches the order 226 with only one of the posted barter orders fromdatabase 216 namely, with posted barter order 208 from the database 216since this posted order 208 barters Aetna stock for Dupont stock at thesame value prices.

Where an additional matching parameter is set that all of an item of abarter order must be bartered, the Himmelstein Option for all 100 Aetnashares of posted barter order 208 must be bartered. In the example, thebarter matching engine 118 would then fail to match barter order 226with any posted order unless the barter website 106 acts as anintermediary as described below. Conversely, in an embodiment where thebarter orders include a minimum share barter parameter, the barterengine 118 matches barterer order 226 if the minimum share parameter ofthe posted barter order 208 is less than 11 shares.

FIG. 3 illustrates a multi-order barter selection 300 having first 302,second 308, third 314 and fourth 320 barter orders according to thepresent invention. Multi-order barter selection may be used either whenno single barter order matches are found irrespective of whether singlebarter orders matches are found in order to find all potential availablebarters among the posted barter orders. In this example, the barterengine 118 cannot fulfill the first barter order 302 with a single oneof the other barter orders 308, 314 or 320. The first barter order 302barters Microsoft stock (stock symbol MSFT) 304 for RedHat stock (stocksymbol RHAT) 306. None of the other posted database orders barter RHATfor MSFT, but barter order 302 can be fulfilled if intermediate bartersare matched. The barter matching engine 118 matches intermediate bartersusing several methods. In one embodiment, barter matching engine 118searches for a posted barter order having a desired stock/HimmelsteinOption that matches the barterer's stock/Himmelstein Option to betraded. Since posted barter order 320 lists MSFT as the desired stock324 and the first barter order 302 stock to be bartered is MSFT 304, thebarter matching engine 118 search for the first half of the first barter302 has been satisfied. However, the barter matching engine must find amatch for the desired stock 306 for the first barter order 302 and mustalso find a match for the first half 322 of the third barter order, 320.Accordingly, the barter matching engine must find a transaction thatsatisfies the desired stock Oracle (stock symbol ORCL) 322 of the thirdbarter order 320.

The barter matching engine 118 searches for an order that trades ORCLfor RHAT in order to make a two posted order barter transaction.However, in the example, there is no posted order that trades these twostocks, so the barter matching engine 118 locates barter order 308 thattrades Puma Technologies (stock symbol PUMA) 310 for ORCL 312. Thebarter matching engine 118 then searches for another posted barter orderthat trades RHAT for PUMA to find a transaction candidate. Barter order314 meets this criteria in that RHAT 316 is traded for PUMA 318.Accordingly, barterer order 302 can be satisfied through posted barterorders 320, 308 and 314. In a preferred embodiment so as to make themulti-order transactions transparent to the barterer, barter matchingengine 118 displays multi-order barters as a single “phantom” postedbarter order. The matching engine 118 creates a transaction and displaysthis phantom barter order in the list of matching barter candidates. Thebarterer simply selects the phantom barter order to finalize themulti-order barter transaction. In these examples, it is assumed thatthe values and other parameters set by the barterers permit all barterorders to occur.

In another method for locating multi-order barters, barter matchingengine 118 begins by searching for the barterer's desired stock 306first. Barter engine locates barter order 314 that trades RHAT 316 forPUMA 318. Continuing in this manner, the engine locates the same postedbarter orders as above, but in the reverse order. In general, the engine118 attempts to link multiple barter orders. One of ordinary skill inthe art of software programming appreciates that a recursive algorithmis well suited for generation of such a linked list.

The operation of barter ordering module 105 allows the barterer to enterthe barter order. In one embodiment of the present invention, thebarterer selects minimum barter order parameters such as the specificstock, quantity and value price of the stock to be bartered in additionto the desired stock and value price for the stock desired. Once theseminimum parameters are selected, other parameters are set to defaultsettings determined by barter ordering module 105. In anotherembodiment, order parameters have interdependencies. For example, abarterer selects a quantity of shares of a stock to be traded as 100shares and sets the per share value price to $15. The total value of thestock, $1,500, is computed by the barter ordering module as the productof the quantity of shares, 100, and the per share value price, $15. Inthe case where the barterer subsequently changes the total value of thestock from $1,500 to $2,000, the per share value price of the stockchanges automatically to $20 since the value per share must be $20 toachieve the $2,000 total value with the 100 shares.

Barter orders may be created for stock and Himmelstein Option for stockbarters as illustrated in flowcharts FIGS. 4A-4E and the screen displaysof FIGS. 5A-5F where the barterer is prompted through each step of thebarter order creation process. For bartering other securities orfinancial interests, including Himmelstein Options, the bartering stepsand screen displays are modified to preferably accommodate all of theparameters for the classes of items identified in FIGS. 9A-9B.

The system 100 in its most generalized configuration permits barters ofdifferent securities, financial interests (including HimmelsteinOptions), or classes of items, i.e. Himmelstein Option for stocks forbonds, foreign currency for Himmelstein Option for T-bills, commoditiesfor stocks, options for T-bills etc. The most generalized configurationof the system 100 permits a barter to select any item in the barterer'sportfolio of securities or financial interest as the subject of aHimmelstein Option which is immediately available for bartering wherethe title to the security or financial interest is not actuallytransferred until the Himmelstein Option is exercised in the range ofsettlement dates specified by the barterer creating the HimmelsteinOption. Where a barterer's portfolio includes such Himmelstein Options,that barterer may create a Himmelstein Option of the Himmelstein Optionin which case the range of settlement dates would be within thesettlement date range of the original Himmelstein Option.

In the example of FIGS. 4 and 5, barter website 106 is accessed via anonline stock trading company that limits bartering to stocks,Himmelstein Options for stock, cash, web barter dollars and combinationsthereof. The flowchart of FIG. 4A begins after the trader selects“Barter” icon 103. Accordingly, barter ordering module 105 has receivedfrom the online stock trading website a barterer's list of currentlyowned stocks, Himmelstein Options for stock, web barter dollars and cashin the barterer's portfolio as well as the quantity and other specificsof these securities via link 104. At step 402 FIG. 4A, the websitedisplays all of the barterer's stock, Himmelstein Options for stock, webbarter dollars and cash available for barter. In step 404, The bartererselects from the displayed items in step 402.

In the embodiment of FIG. 5A, a symbol 502 representing a selection ofthe barterers portfolio of stocks, Himmelstein Options for stock, webbarter dollars and cash is displayed. The barterer selects, the downwardtriangle 501, to display all available stocks, Himmelstein Options forstock, web barter dollars and cash as shown in 503, an * indicating theownership of a Himmelstein Option for the stock and date or range ofdates for settlement instead of ownership of the stock itself.Preferably, blanks are provided to indicate an indefinite opening orclosing for the Himmelstein Option settlement period. For example, theDuPont Option, DD* is depicted having an indefinite closing date.

The system preferably further indicates if the barterer's security iscurrently included in a posted barter order requiring the barterer tocancel said posted barter order prior to selecting the security for anew barter order. Optionally, an alphabetical list of companies and/orstock symbols is displayed for alphabetical searching and/or theportfolio quantity 504 of the stock is also displayed. The barterer mayenter the selected item 502 by typing it in. Preferably when thebarterer begins typing the name or symbol of the company, the barterordering module locates the first listed item that matches the enteredcharacters. Alternatively, the portfolio is displayed for selection viaan array of pull down menus 507, each displaying one class of the itemsof the barterer's portfolio.

Once the barterer locates and selects the item to be traded, the totalquantity of the selected item in the barterer's portfolio (as may beprovided by the online stock trading website) is automatically displayedin step 406 of FIG. 4A as the quantity to be bartered. At step 408, thebarterer can modify the quantity to be bartered 410. As shown in FIG.5A, the quantity 504 can be modified via selection of the directionalarrows 505 or the barterer can enter a new quantity value. In eithercase, in this embodiment the barter order module 105 does not allow aquantity value that exceeds the quantity owned by the barterer.Alternatively, the system 100 may be configured to permit the bartererto select a range of quantities to be bartered. For example, thebarterer may specify a range such as 50-100 shares for barter.

Preferably, the barter ordering module 105 has access to trading pricesat step 412 of FIG. 4A, so that the trading price of the selected stockis displayed along with the time and date of the trading price asillustrated in display section 506 of FIG. 5A. A fixed per share valueof the stock or Himmelstein Option 508 of FIG. 5B is initially set tothe trading price. If barterers are trading away cash or web barterdollars, the system 100 in that instance may rearrange the screens andprompt the security being bartered for prior to prompting the cash orweb barter dollars being traded away. As one skilled in the art willrealize, the fields which are not applicable to cash or web barterdollars are modified to properly reflect what is being bartered. At step414 of FIG. 4A, the barterer can elect to trade at the displayed tradingprice or select a new barter value 416. As FIG. 5B illustrates, thebarterer can change the default fixed per share value 508 or select thevalue of the stock to be bartered based on the fluctuating stock tradingprice by selecting block 510.

By selecting the fluctuating value price, the value fluctuates until abarter transaction is finalized by a subsequent barterer who selects thebarter order. For example, if IBM stock was trading at $115 per shareand the barterer selects “barter at current stock trading price”, thebarter price would be $115 per share if the transaction occurredinstantaneously. However, if the barter transaction occurred two weekslater and the stock trading price dropped to $110, then $110 would bethe barter value price. Likewise, if the stock trading price went up,then the barter price would be that higher price.

Optionally, the barter value can be based upon the current stock tradingprice plus or minus a certain value or percentage in step 416 in FIG. 4Aand at step 511 in FIG. 5B or the barter value can range around afluctuating trading price specified as either a value amount or apercentage of the fluctuating trading price. To do this the bartererselects a range around the fluctuating stock value as illustrated inFIG. 5B at 512, 518. The range can be a value amount 514, 517 or apercentage of the fluctuating trading price 516, 519. By selecting boxes512 or 518, the barterer selects whether the range is added to orsubtracted from the fluctuating value. For example, if the range was setto plus 1 percent at step 416 (by selecting box 512 and entering 1% inbox 516) and the market price for IBM stock to be bartered, at the timeof the barter transaction was $115 per share, a posted barter order witha value price between $115 and $116.15 would match the barterer's order.A barterer may issue a Himmelstein Option to barter away IBM stock aslow as minus 9 percent of the $115 IBM market price by checking box 518and entering 9% at box 519 so that a posted barter order with a valueprice between $104.65 and $115 would match the barterer's order.

Once the value of the item to be bartered is selected in step 416 ofFIG. 4A, the barter ordering module displays at step 418 of FIG. 4B thetotal barter amount and the percentage or dollar amount of the valueprice in relation to the available market price per share in FIG. 5B, at520. Should a range of value price be selected, the display 520 ismodified to reflect such. In the example of FIG. 5B, the barterer canchange the barter value 520 by clicking on a “change” icon 522 and goingthrough the appropriate steps or accept the value 520 by clicking on a“continue” icon 523. This is also shown at step 420 of FIG. 4B.

At step 422 of FIG. 4B, barter order fee amounts are displayed. Feeamounts, as illustrated in sample screen display lines 524 and 526 ofFIG. 5C, are determined based on whether the barter order is to beposted to the barter order database 524 or the barter should occur withthe barter website directly 526.

At step 424 of FIG. 4B, the barterer selects the time in which thebarter order is valid. As illustrated in the embodiment of FIG. 5C,timing options 528 are displayed once the barter selects the down arrow.The five options are:

1) day only;

2) good until canceled;

3) fill or kill;

4) immediate or cancel; or

5) only view the current posts.

The “day only” options means that the barter order can be posted to theposted barter database only until the end of the day. Thereafter, thebarter order are expunged from the posted barter order database. The“good until canceled” option means that the barter order remains postedto the posted barter order database until it is canceled by thebarterer. If the “fill or kill” timing option is selected, the entirequantity must be filled or the barter order is canceled. With “fill orkill” timing, the barter order is not be added to the posted barterorder database, but the database is searched for a match. Similarly, abarter order is not added to the posted barter order database if the“immediate or cancel” timing is selected. In this case, a posted barterorder for only part of the barterer's quantity matches the barterer'sorder. The last timing option, “only view the current posts”, never addsthe barter order to the posted barter order database. Instead, thebarter matching engine 118 displays the current matches found in theposted barter order database.

At step 426 of FIG. 4B, the barterer may select special conditionalparameters. The available special conditions are “minimum quantity,” “donot reduce,” “all or none,” and “deferred settlement.” The displayportion 530 of FIG. 5C illustrates one means of selecting specialconditions. In this embodiment, the barterer may select one of theconditions by selecting a corresponding box. If the minimum quantitycondition is selected, the barterer then either adjusts the displayquantity via the arrows or enters a minimum quantity value. The defaultminimum quantity may be set to equal the barter quantity 504. Selecting“do not reduce” means the per share value will not be reduced even ifthe transaction date is the stock's dividend date. If the bartererselects the “all or none” option, all barter matches must barter theentire quantity of the stock to be traded away.

Selecting the “deferred settlement” condition creates a HimmelsteinOption of the item being bartered. The barterer is then required toidentify open and close settlement dates, which may be the same. If thebarterer is already bartering a Himmelstein Option, the barter orderingmodule 105 automatically selects “deferred settlement” and displays thedate used by the original creator/issuer. The barterer may modify thedates as long as the modified dates are within the range of dates usedby creator/issuer. Optionally, at step 531, FIG. 5C the barterer mayenter a subsequent amount of the security or a different security to beprovided at settlement. As hereinbefore described, the system willprompt barterer to include minimum criteria to clearly identify thesecurity and the value.

At step 428 of FIG. 4B, if the desired security is stock, the bartererselects between three choices for the desired stock with respect to adividend reinvestment option. Accordingly, the barterer choosesbetween: 1) the stock must have a dividend reinvestment program; 2) thestock must not have a dividend reinvestment program; or 3) accept newstock with or without a dividend reinvestment program. In the embodimentillustrated in FIG. 5D, the barterer selects the desired option byselecting the corresponding box in section 532.

At step 429 of FIG. 4B, the barterer chooses the type of barter theywish to transact, (i.e. a direct barter only or permit the website toact as the barterer or use an intermediary if a direct barter is notavailable). The barterer can request a direct barter with an order fromthe posted barter database at a first fee rate, or in the alternativefor a second fee rate, the barterer can request the website to be thebarterer. The first and second fee rates may be the same or changeindependent of each other. At times to promote automated websitebartering, depending on the securities to be bartered, the second feerate may be set at a relatively low rate, or it may be set to a premiumrate for the automated service. According to the embodiment illustratedin FIG. 5D, the barterer selects the type of transaction in section 534.

Following the selection of barter type, step 429, posted barter ordersmay optionally be displayed 430 based on matches of posted order “to beacquired” items with the barterer's “to be bartered item.” In the caseof a direct barter, a trade can be displayed immediately if a match isfound in the database, or the barterer can complete and post the orderto the database and await a match from a subsequent barterer. In thecase of a barter with the website, the transaction is displayedimmediately provided the website can buy or obtain the stock,Himmelstein Option, web barter dollars or cash desired by the barterer.Here, the website uses a predetermined formula including taking intoaccount the relationship with the barterer to calculate the fee for thistype of transaction.

The barterer selects the desired stock, Himmelstein Option, web barterdollars or cash price to acquire for the barter order at step 431 ofFIG. 4B. If the barterer's desired security is a stock, HimmelsteinOption, web barter dollars or cash, the barterer checks the appropriatebox in display 537 as illustrated in FIG. 5D. Optionally, if thebarterer's desired security is stock, the system 100 displays all stockand Himmelstein Options for the desired stock in the database, allowingthe barterer to accept a Himmelstein Option in lieu of actual stock. Ina manner similar to that of selecting a stock to be traded from thebarterer's portfolio, stock symbols 535 are displayed upon selection ofa down arrow. Optionally, the barterer can select from a list ofindustries 536 wherein the stock symbols 535 are filtered to list onlythose related to the selected industry. Alternatively, a mergedalphabetical list of companies and/or stocks is shown for alphabeticalsearching. Additionally, the system 100 can be configured to showvarious companies (in a predefined sort) including the symbol andpredefined financial information.

If the barterer chooses a stock or Himmelstein Option, by selecting it,the system 100 displays the symbol 535 pertaining to the chosen company.Next, in step 432 of FIG. 4C the barter ordering module informs thebarterer of the available stock trading price of the desiredstock/Himmelstein Option, along with the current date and time. Onemethod of displaying the price is illustrated in FIG. 5D at section 538.

The barter value of the desired item defaults to the available stocktrading price at section 540 of the display of FIG. 5E for stock, orHimmelstein Option. Further, if the system 100 had a barterer trading astock or Himmelstein Option for cash or web barter dollars, the system100 may prompt in 540, the stock trading price of the stock orHimmelstein Option being traded away. The barterer can accept thedisplayed value at step 434 or select a new value at step 436 of FIG.4C. In the display of FIG. 5E, the desired stock value for stock orHimmelstein Option can be selected similar to that of selecting thestock value to be traded. The barterer can select a fixed value usingbox 540 or a value plus or minus the stock trading price (similar tostep 511, as shown in FIG. 5B) or a fluctuating stock value range insection 541 in a manner as described in connection with 510-519 of FIG.5B. The stock value can range around a fluctuating trading pricespecified as either a value amount or a percentage of the fluctuatingtrading price. Thereafter, as indicated in the flowchart of FIG. 4C atstep 438, the total desired barter amount and percentage or dollaramount to the stock trading price is displayed as illustrated in sampledisplay 542 of FIG. 5F. At step 440 of FIG. 4C, the barterer can changethe barter value of the desired item which steps can be implemented byclicking the “change” icon of display section 542 of FIG. 5F.

At step 442 of FIG. 4C, the present invention assists the barterer indetermining whether the barter order is financially advantageous to thebarterer. Several ratio formulas, termed Himmelstein Value Ratios, areprovided to assist the barterer. In the embodiment of FIG. 5F at section544, the barter ordering module selects the specific formula and theHimmelstein Value Ratio is displayed. The barterer may then change thebarter order per step 444 by selecting a change icon in section 544 ofthe display FIG. 5F.

In an alternative embodiment, the barterer selects the desired formulaafter receiving help text describing the formulas. Regardless of themethod used to select a particular formula, there are three preferredformulas:(x/y)/(a/b)  Value Ratio 1)(a/b)/(x/y)  Value Ratio 2)(b/a)−(y/x)  Value Ratio 3)where: a=value price for security/Himmelstein Option desired to tradeaway

-   -   b=current security trading price for security/Himmelstein Option        desired to trade away    -   x=value price for security/Himmelstein Option desired to obtain    -   y=current security trading price for security/Himmelstein Option        desired to obtain

For example, using Himmelstein Value Ratio 2, a barterer owning Cokestock or Coke Himmelstein Option is willing to barter it away at a valueof $65 per share, and Coke is currently trading at $67 on the stockmarket. If the barterer desires to barter for IBM stock, or IBMHimmelstein Option at value of $110 per share and the stock is currentlytrading at $115 per share on the stock market, the Value Ratio formulais: ((65/67)/(110/115))=1.014, which means that if the barterer tradingCoke stock/Coke Himmelstein Option for IBM stock/IBM Himmelstein Optionchose to complete the transaction, they will gain 1.4 percent. Inessence, in this formula anything less than 1 is a stock/HimmelsteinOption barter transaction that loses value and anything greater than 1is a transaction that gains value. This formula is important tounderstand the relationship between the value of the stock/HimmelsteinOption that is being traded away and the stock/Himmelstein Option thatis being obtained. In lieu of displaying the Value Ratio, the system 100may display the actual percentage of increase or decrease afterinterpreting the Value Ratio. Variations of the above formulas may alsobe used. Any Himmelstein Value Ratio formula may be modified by addingor subtracting a predetermined value or variable. For example, Formula(a/b)/(x/y) may be changed to have the value “−1” subtracted to itmaking the new Formula (a/b)/(x/y)−1. If Himmelstein value formula(a/b)/(x/y)−1 is greater than 0.00 then to what extent greater is thepercentage of profit, which in the above COKE/IBM example is 1.4%. AnyHimmelstein Value Ratio formula may be modified by multiplying ordividing a predetermined value or variable. For example, formula(a/b)/(x/y) may be changed to have the variable “y/x” multiplied to itmaking the new formula (a/b)*(y/x) or (y/x)*(a/b). If Himmelstein valueformula (a/b*y/x) is greater than 1.00 then to what extent greater isthe percentage of profit, which in the above COKE/IBM example is 1.4%.Any Himmelstein Value Ratio formula may be modified by having both apredetermined value or variable added or subtracted while at the sametime multiplying or dividing by another predetermined value or variable.For example, formula (b/a)−(y/x) may be changed to have the value of “1”added to it and have the variable “−1” multiplied to it making the newFormula ((−b/a)+(y/x))−1 or ((y/x)−(b/a))−1. If Himmelstein valueformula ((y/x)−(b/a))−1 is greater than −1.00 then to what extentgreater is the percentage of profit, which in the above COKE/IBM exampleis 1.4%.

For securities such as CD's, bonds, annuities and government bonds thatprovide an interest rate/current yield until a due/maturity date, thesystem may calculate the actual income from that present day forward tobe earned, factoring in the type of interest and adding same to allapplicable variables (i.e. b or y) in the above stated formulas. For thesecurities stated above, the barter order module may require thesettlement date to be the same date as the due/maturity date. In otherwords, the variables in the above formulas would be defined as:

-   -   a=value price for security/Himmelstein Option desired to trade        away.    -   b=current security trading price for security/Himmelstein Option        desired to trade away, plus future interest income from that        present day forward to be earned, but not paid, before the        earliest settlement date of the securities being bartered.    -   x=value price for security/Himmelstein Option desired to obtain.    -   y=current security trading price for security/Himmelstein Option        desired to obtain, plus future interest income from that present        day forward to be earned, but not paid, before the earliest        settlement date of the securities being bartered.

For barter items or securities such as CD's that do not have a currenttrading market, the system 100 can also calculate the accrued, not paid,interest from issuance up to the present day. In other words, thevariables b and y in the above formulas in such instances are modifiedas follows:

-   -   b=system calculated security trading price for        security/Himmelstein Option desired to trade away includes the        following:        -   original purchase price or face value of barter item or            security plus,        -   accrued unpaid interest income from issuance up to the            present day plus,        -   future interest income from that present day forward to be            earned, but not paid, before the earliest settlement date of            the securities being bartered.    -   y=system calculated security trading price for        security/Himmelstein Option desired to obtain includes the        following:        -   original purchase price or face value of barter item or            security plus,        -   accrued unpaid interest income, from issuance up to the            present day plus,        -   future interest income from that present day forward to be            earned, but not paid, before the earliest settlement date of            the securities being bartered.

Optionally, for securities such as CD's that do not have a currenttrading value, the system 100 may have the applicable variables (i.e. bor y) include the original purchase price or face value plus accruedinterest income, excluding future interest income so that the systemprovides a “current day” value. The barterer may select the desiredformula, including the definitions of b and/or y for each security in abarter transaction after receiving help text describing how eachvariable may optionally be defined in the formulas.

If the securities being bartered have different due/maturity dates, thesystem 100 may use the present day to the earliest settlement date asthe period of time for calculating the income to be earned, calculatingeach securities' actual interest rate/current yield, factoring the typeof interest, and adding same to the respective variables (i.e. b or y).To ascertain a more accurate Value Ratio, when one security has interestincome, such as CD's, and another security does not, such as stock, thesystem may include or exclude interest income from the Value Ratioformulas depending on the formula chosen by barterer/system. The system100 may disclose and or incorporate the actual formula(s) used toascertain the Value Ratio into a finalized transaction agreement.

Where no conventional market value is available, the system 100 may beconfigured to examine posted barter orders or develop methods or newformulas to determine a current trading price.

Referring to FIG. 4D at step 446, the barterer can review the barterorder prior to submission of the order to the barter matching engine. Asillustrated in the embodiment of FIG. 5F the barter order module listsat section 546 the terms and conditions before the barterer submits theorder by clicking an appropriate icon 548. Alternatively, the barterermay decide to terminate the barter order creation by clicking a “QUIT”icon 549.

Once the order is submitted by the barterer at step 448 of FIG. 4D, thematching engine searches the website database for a barter order or inan embodiment where the engine matches multi-order barters, multiplebarter orders to satisfy the submitted order. If no match is found atstep 450, the barter matching engine determines whether the order shouldbe posted to the database 452 based on the timing selected at step 424of FIG. 4B. If the order should be posted, the barter order databasemodule 116 posts the order to the database.

After the barterer clicks on the “continue/agree” icon 548, (anddepending on the timing chosen), the system 100 in accordance with FIG.4D posts the barter as an available transaction 452, 456 and/or findsand displays “matching” posted barter orders 450, 454 via the screendisplay illustrated in FIG. 6. The “matching” in the preferredembodiment includes matching the barterer's desired item and barteritems with the barter and desired items of single or multiplecombinations of posted barter orders where any matched Himmelsteinoptions have overlapping settlement dates.

Where posted barter orders are displayed, preferably the barter ordersare listed by the lowest share price of the stock or Himmelstein optionthat the barterer wishes to acquire such as in display section 610 ofFIG. 6. If any one of the available barter orders requires the price tofluctuate with the stock market, the display is preferably continuallyupdated so that the prices reflect market value as close to real time aspossible. The screen also displays the order number, symbol, shareprice, ratio to stock trading price, Value Ratio, number of shares,barter amount, barter price fluctuate with stock trading price, specialconditions, timing, and dividend reinvestment criteria.

If the individual decides that they are willing to barter away some orall of their selected portfolio stock/Himmelstein option for one or morebarter orders listed, they select to do so 458, of FIG. 4D (or as longas they have more barter amount available) by simply clicking on eachorder, (i.e. choosing first preference then second preference, and soon). Each time an order is chosen, the system 100 permits/requires theindividual to revise their original quantity, and value price in thestock/Himmelstein option for which they desire to trade away in thebarter, thereby requiring the individual to accept the prices and theamount of stock/Himmelstein option received in return from the barterorder that they had selected. When a posted order is chosen, the system100 enters the corresponding information in a table on the screen tonotify the individual of the transaction number, number of “sharestrading away” with item price, number of “shares receiving” with itemprice and barter amount with totals at bottom of the table as reflectedin screen table 620 of FIG. 6. For cash and web barter dollars, thefields which are not applicable remain blank. Optimally, the system maydisplay in 620, the after date and before date for Himmelstein Optionsbeing acquired or bartered.

Each time a transaction is chosen, the system 100 reduces the value for“amount of barter left” in a display box 622. If an individual has lessthan an available barter transaction, (with no special conditions nortiming limitations) when the individual selects the order number, thesystem 100 shows the number of shares for which the barter is permitted.Upon selecting each order, the system 100 shows the residual amount in adisplay box 624 and presents three choices 460: 1) holdstock/Himmelstein option in escrow; 2) donate the stock/Himmelsteinoption; and 3) purchase other stock/Himmelstein option. If any of thesechoices are chosen, the system 100 displays additional screens tocomplete the above tasks. Optionally, the system 100 may allow thebarterer to convert the residual amount into web dollars which are addedto the barterer's portfolio after the transaction is completed.

Additionally, when a barter order is chosen, the system 100 “locks” thebarter order, including the price, to the individual for a predeterminedduration. A display of the time remaining to complete the transactionappears in a “time remaining” display box 626. Should the time expire,the system 100 provides two options: 1) finalize transaction; 2) or losetransaction in “X” seconds, with seconds decrementing on screen. Thesystem 100 may, if desired, inform the individual that someone else islooking at the same barter order and may inform other users that thereare pending barter orders which may come available.

Upon the individual reviewing available barter orders and deciding whatthey want to do, (i.e. accept one or more orders or none), they proceedby choosing one of the following four icons 631-634: 1) clear; 2) changebarter order; 3) finalize transaction; and 4) finalize transaction butdisplay more barter options. Each option leads to the display ofadditional screens to complete the selected task as indicated in FIG.4E.

In addition to the main bartering screens, the system 100 may includepop-up screens to show “history” of past barter transactions and to showperformance on how a security is performing, and the current Value Ratioformula provided from past transaction(s). If an individual barteredaway Himmelstein Option(s) that have not gone to settlement, the systemprovides a screen selection showing the security or securities, therange of settlement dates allowed and preferably includes all of thecriteria or information in the actual barter transaction.

The system 100 exhibits other special conditions such as if the value ofa security falls, the system 100 may require barterers to barter some orall of a security back; an election to require that the Value Ratio muststay within a specified range for a specified time or trigger an actionby the system 100 such as a penalty, or forcing the individuals switchsome or all security back, etc.; and the entry of multiple securities orsymbols, and corresponding value prices, and permit the system 100 toautomatically take the best Value Ratio as long as Value Ratio is over aspecific number (i.e. such as 1.00) set by the barterer and the system100 automatically completes the transaction if posted barter ordersexist meeting that criteria.

The system 100 may be programmed to automatically purchase securitywithin a predetermined value range when a barter order is posted ormarket values change, complete a barter transaction for the barter orderand sell the acquired security while charging an appropriate fee. Thesystem 100 may act as a negotiator between barterers, sending each ane-mail or otherwise notifying them when the search engine discoverspotential matches among barter orders. The system 100 may permit accessby individual barterers to the identity of barterers who have posted“matching” barter orders to allow them to negotiate directly betweenthemselves through e-mail or otherwise. The system 100 may requiree-mail sent through it to purge “identity” (i.e. ensure anonymity). Thesystem 100 may create an e-mail subsystem allowing individualsinteresting in bartering to enter limited pertinent information into theblanks of the agreement being presented to one another only identifyingthe individuals by the order number that was created by the system 100when it originally posted the barter order. This is referred to as an“offer to purchase.” The system 100 may lock the individual's securitybeing offered for a specified time allowing the individual receiving theoffer time to accept, modify, or reject the offer. In other words, theindividual making the offer cannot back out unless the person receivingit fails to respond within the time frame, modifies it or rejects it.

The system 100 can also be configured for telephone access so that allfunctions that one may do online may be done over the telephone.Additionally, pre-approved individuals can be permitted to barter forsecurities (which the website holds in escrow) prior to bartering theirown securities.

In the generalized version of the barter system, various types ofbarters may be implemented as schematically illustrated in FIGS. 7Athrough 7E.

Referring to FIG. 7A, a two party exchange or direct barter isillustrated. For example, Individual “A” barters directly withIndividual “B” effecting an exchange of securities, X and Yrespectively. Example, Individual “A” issues or posts a HimmelsteinOption to barter 100 shares of AOL worth $1,000 (Stock “X”) for 200shares of IBM worth $1,000 (Stock “Y”) after Jan. 1, 2000 and beforeFeb. 1, 2005. Individual “B” accepts the Himmelstein Option effectuatingan agreement to immediately barter 200 shares of IBM for the rights toacquire 100 shares of AOL in the future. A receives the 200 shares ofIBM from B and irrevocably commits A's 100 shares of AOL to betransferred to B or B's designee at any time settlement is demandedbetween Jan. 1, 2000 and Feb. 1, 2005.

In the event the barter transaction is not an exact match in value, thesystem 100 may balance the barter transaction by allowing one bartereror the other to pay cash, provide web barter dollars, offer a differentsecurity, such as a Himmelstein Option on a different security, or allowthe barterer to acquire more of the particular security that they arebartering.

Referring to FIG. 7B, a two party exchange with an intermediary isillustrated. For example, Individual “A” barters with Individual “B” totrade away security X and acquire security Y through an intermediary. Ifa match is located but the values are not equal, the intermediary mayretain the excess security and supplement the barterer bartering awaythe greater value security with cash, provide web barter dollars, adifferent security, such as a Himmelstein Option on a differentsecurity, or acquire more of the desired security (by first acquiringsuch).

The intermediary either obtains additional cash, a security, such as aHimmelstein Option, or more of the desired security, such as aHimmelstein Option from the other barterer and/or from a third party(upon which the intermediary reciprocates a security, such as aHimmelstein Option, cash, or web barter dollars). For example, using thesame values above, Individual “A” issues or posts a Himmelstein Optionto barter 100 shares of AOL for 200 shares of IBM. Individual “B” has100 shares of IBM that he would like to barter for the rights to acquire50 shares of AOL in the future. The intermediary keeps the HimmelsteinOption for 50 shares of AOL and acquires the additional 100 shares ofIBM and completes the exchange with individual A.

FIG. 7C illustrates a three party transaction with an intermediary.Individual “C” barters away security Y to receive security X. Theintermediary, which may be the barter website, identifies Individuals“A” and “B” to complete the transaction. Individual A sells or barterssecurity X for cash and Individual B buys or barters security Y forcash. The cash amounts may or may not be equal, but Individuals A, B andC may incur a service charge from the intermediary/website for theservice provided. In lieu of cash, web dollar credits are preferredwhere the website acts as intermediary. In another embodiment, thesystem 100 may allow the barterers to barter away their securities orfinancial interest at a different time than when they receive a securityor financial interest. This is a “Deferred Exchange.”

FIG. 7D illustrates a three party transaction without an intermediary.In this example, barterer “A” receives cash for security or financialinterest X. Barterer “B” receives security or financial interest X inexchange for security or financial interest Y. Barterer “C” receivessecurity or financial interest Y for the cash which is received bybarterer A.

FIG. 7E illustrates a two party exchange with an intermediary. Barterer“A” wants to exercise a Himmelstein Option (i.e. have settlement andtake title) to own the security in the Himmelstein Option. In thisillustration, the system 100 may require in the Agreement that toexercise the Himmelstein Option, the barterer must do so through thesystem 100. Barterer A trades the Himmelstein Option on financialinterest X for the actual interest X to the intermediary. Theintermediary acquires the interest X from source B in exchange forconsideration Z. The intermediary then maintains Himmelstein Option forX in its own portfolio for future bartering. Z may be web dollars orsome other security or interest acquired by the website in a similarmanner. Alternatively, if the value of Z is more than the HimmelsteinOption for X, the system 100 allows Barter “A” to exercise theHimmelstein Option (i.e. have the settlement on security X).

Where the system 100 or a designated entity acts as an intermediary, abarterer can create a barter order that does not require a security atthe same time it barters away its own security. For example, anindividual may allow their security to be bartered for an interest ofequal value which the barterer can identify at a later time. Theunderstanding being that the barterer can defer the completion of thetransaction by the website or a designated entity acting asintermediary. If another barterer accepted the barter order terms, thefunds for the transaction are immediately placed in an escrow account.For example, if the current tax law permitted, the system 100 wouldallow “X” number of days to choose a particular security and “X” numberof additional days to actually acquire the new security. Therefore, thewebsite or a designated entity may hold the securities in escrow as athird party. The website or a designated entity may, upon being directedby the barterer who has funds in escrow, acquire a specific security tocomplete the barter. In this embodiment, the system 100 may continuallyupdate the barterer with respect to the security such as stocks (re:stocks that the individual informed the system that they were interestedin) with respect to the current “closest” matches for a specific stockor range of stocks that exist in the database system, based on the ValueRatio formula(s) that were previously defined herein. This can be doneby either e-mail, phone, or when the barterer accesses the website.While online, the system 100 may continually update the closest matches,thereby permitting an individual to either ignore, choose one, or choosemultiple ones. If the individual chooses a match or several matches,with excess remaining funds, these excess funds are held in escrow.

The system 100 may be configured to only barter Himmelstein Options orthe future rights. Reiterating, a Himmelstein Option is an agreementgiven by the individual that owns the barter item or security, anirrevocable right to another party that after a specific date and beforea specified date, this party has the right to “go to settlement” andacquire the barter item or security. Further, the Himmelstein Optionallows the party in possession or any party currently in possession tobarter said Himmelstein Option, i.e. transfer said rights forsettlement. Barter order parameters then include an “after date” uponwhich a Himmelstein Option may be exercised and an “expiration date”that the Himmelstein Option expires. The expiration date may be anindefinite date. For example, barterers may do this to diversify theirportfolios where they do not have the right to sell a securityimmediately, (such as via a preexisting agreement with an employercompany). If the security is unregistered, the system can, after theholding period, directly process the stock with a designated transferagent in order for it to be allowed to be transferred, i.e. go tosettlement. In this instance, only Himmelstein Options are able to beimmediately bartered since the barterer cannot transfer the securityuntil after a specific date.

The Himmelstein Option value and security value may be different, andusually would be different if the Himmelstein Option expiration date isa specified date and not open or “indefinite”. Both dates and values arepreferably displayed for matching barter orders in a manner similar tothe display of FIG. 6.

Acting as an intermediary, the system 100 can hold a barter item orsecurity in a trust account if, or until, someone exercises aHimmelstein Option to acquire it. A barterer posting a HimmelsteinOption barter order chooses the after and expiration date which date(s)must be within the terms of their Himmelstein Option if they are not theactual owner of the security. The system 100 may prompt the expirationdate as “indefinite”, with the barterer who is creating the HimmelsteinOption away having the ability to modify the Himmelstein Option barterorder with a specific date. The value of the “Himmelstein Option” isworth less if there is an expiration date, at which time the HimmelsteinOption no longer exists. If the barter item or security subject to theHimmelstein Option is held in trust by the system 100, the systemreturns the item or security upon expiration date to the barterer whohad offered the Himmelstein Option or the party who settled theHimmelstein Option and obtained “title.” The purpose of the system 100holding the security “in escrow”, or in trust, is to ensure that abarterer acquiring a Himmelstein Option has a complete assurance thattheir right of ownership is “guaranteed” should they exercise it at afuture date. The system 100 has the ability, (if it were a security suchas stock or a mutual fund), to include or exclude the dividends, longterm gains and losses and short term gains and losses. If the dividends,long term gains and losses, and short term gains and losses wereincluded, at the end of each tax year, the 1099-DIV and gains and lossesissued may be transferred to the system 100 as the “nominee” which mayin turn, make the “nominee” the individual who had obtained theHimmelstein Option or the rights of ownership to the security.

Himmelstein Options having an “after date” and an “expiration date” whensettlement can occur has a number of benefits for individual barterers.A barterer bartering away securities can ensure that a sale occurs afterthe barterer has owned the security more than one year so that anyincome is taxed at capital gains rate instead of ordinary income rate.If a barter works for a company that requires them not to sell thesecurity for a specific time period, but the barterer wants to diversifytheir portfolio, the system 100 allows them to do so.

The system 100 has other advantages. For example, incorporating thesecurity stock into a Himmelstein Option that is bartered removesuncertainty (i.e. future risk). This is beneficial in many instances.For example, successful, educated investors desiring to decrease theirstock portfolio can recognize this benefit and utilize the HimmelsteinOption to reduce their stock portfolio in a controlled manner.

Since the system 100 allows securities, such as CD's to be incorporatedinto a Himmelstein Option, if one wanted to become liquid prior tomaturity, one can barter away a Himmelstein Option on the CD in lieu ofincurring a penalty for early redemption. The net value of theHimmelstein Option issued is logically set by the barterer to be lessthan the penalty.

The system 100 is preferably configured to internally track allindividual rights when acting as an intermediary or escrow. If abarterer wants to “cash out”, the system may permit them to barter theirsecurities including a Himmelstein Option away for cash, oralternatively require them to exercise their Himmelstein Option and thensell their securities that they acquired.

For tax purposes, the system 100 can require a barterer to transfer withthe security their estate exemption (or a portion thereof) up to theallowed estate exemption amount (which is currently $625,000) as a gift.In this case, the barterer is not entitled to this at death. When thatindividual receives a security in return, the individuals from whom thesecurity came would also have given an estate exemption. Also, thesystem 100 can be configured to utilize the gift tax exemption. Inessence, allowing a barterer to gift up to the maximum non-taxableamount, which is currently $10,000, to each and every individual thatthey barter with at which time they receive the same amount back in thesecurity such as cash as “a gift”. This requires all gift transactionsto be less than or equal to $10,000.

If Section 1031 of the Internal Revenue Code of 1986 is amended toinclude securities as defined earlier, the present system can beconfigured to effectuate a tax deferred exchange should one or bothbartering parties desire such. Further, the system 100 can be adapted,modified or changed to utilize or capitalize on any existing or futuretax laws.

Per the S.E.C., barter transactions or transfer of rights are notregistered. Thus, this system permits bartering in a discrete and/oranonymous manner, (i.e., not informing the public). However, the system100 is preferably configured to compile historical barter informationregarding barter transactions of each barter. Additionally, the system100 may be modified to meet S.E.C. regulations, if required. Terms andConditions in a Himmelstein Option can include contingencies forsettlement. For example, a Himmelstein Option may be bartered with acontingency that for settlement it must meet SEC approval.

The present system permits any type of securities or financial intereststo be bartered, including but not limited to CD's, stocks, bonds, notes,evidences of indebtedness or interest, interests in a partnership,certificate of trust or beneficial interest, etc. The system 100 caninterface with or be incorporated as part of online companies in such afashion that it is transparent to the clients of the online tradingcompany. When a client from an online trading company desires topurchase a particular security, the online trading company may choose toacquire, if available, from another individual who has entered atransaction to barter their security away. The online trading companycan act as the intermediary and barter for the security, in essencemaking the online trading company the system 100 barterer with theability to acquire new stock and/or any security, and then sell it totheir online client. By doing this, the online company can keep theentire spread between the “ask and bid” with no commissions, andundercuts traditional stock exchanges in price and speed by eliminatingintermediaries such as floor brokers or specialists from the tradingprocess.

The system 100 can be configured to handle “exchange funds” often knownas “swap funds” or (Private Placement Memorandum) P.P.M. wherein anindividual puts in their financial interests or security (such as stockshares) into the fund for exchange units of the entire fund. This allowsthe individual to diversify their financial interests or securities suchas stock holdings without having to pay capital-gains taxes. In such acase, the system 100 maintains “system” funds and barterers exchangevarious financial interests for units of the “system” fund. The system100 can also be configured to further open and close new funds whendeemed necessary by the system or by preset parameters.

The system 100 can allow barter orders to require only some security upfront at the time of the Himmelstein Option Agreement being consummated.This portion of the security or commodity may or may not be refundable.The balance of the Agreement would only be paid if the HimmelsteinOption is finalized, or ownership of the security is transferred.

For example, a posted transaction can state that the Himmelstein Optionmust occur after Jan. 5, 2000 and before Jan. 6, 2000 and the bartereris bartering AOL stock for cash or web barter dollars for $5.00 pershare paid immediately which is non-refundable and $95.00 per share atsettlement. Individuals accepting this Himmelstein Option must pay the$5.00 per share which is non-refundable. On Jan. 6, 2000 if the AOLstock is less than $95.00 per share, the individual will choose not toexercise their rights in the Agreement, thereby allowing the Agreementto expire. This is to be defined as selling long, in the “virtual stockmarket”, (i.e., system 100).

In an alternative embodiment, the system 100 may allow a barterer toissue a Himmelstein Option on a security that the barterer does not own,nor have a Himmelstein Option (i.e. rights to own). If, or when, theHimmelstein Option is chosen (for example, by person “A”) the bartereris required to acquire the security or the Himmelstein Option that wasbeing traded away, on or before the date after the barter transactionmay occur, to then hand it over to person “A”. This is to be defined asselling short or trading futures in the “virtual stock market” (i.e.system 100).

The virtual market (i.e. system 100) can handle what is referred to inthe financial industry as a margin account wherein the system 100 allowsthe barterer to borrow web barter dollars, cash or issue HimmelsteinOptions against the value of their portfolio including HimmelsteinOptions in their possession.

When someone issues a Himmelstein Option, the barter transaction canalso allow the person issuing the Himmelstein Option to enter adifferent before and after date for the Himmelstein Option for the newsecurity desired. Therefore, in this embodiment, the system 100 mayrequire the person posting the transaction for the Himmelstein Optionfor the security desired to give a specific date before, and a specificdate after, or a range of dates that would be acceptable. This range ofdates may be disclosed to potential barterers; or in the alternative,can be undisclosed (making a potential barterer be required to choosespecific dates, before and after) without knowing the range of datesthat the individual posting the Himmelstein Option used.

With respect to the securities that provide dividends, interest etc.,the system 100 can further do the following. The system 100 may keep thedividends, interest etc. as part of the transaction, and may put in acommon “pool” all dividends, interest etc. realized. A formula is usedto proportion the amount between any, and all, clients holdingHimmelstein Options for the specific class of items.

The system 100 can require barterers to enter Himmelstein Options orbarter orders in round lots. For example, if the security was stock, thesystem 100 can require increments of 100 shares.

The system 100 can have the ability to break down posted order(s) intospecific dollar and or quantity amount(s) allotment and re-post. Forexample, if the system 100 chose to break down into a specific dollaramount, the system 100 can choose one thousand dollar amount(s) orblock(s). If someone posted 10 shares of IBM stock at $110.00 for eachshare, the system 100 can re-post to be 2 barter orders: one order to be9 shares of IBM stock with 10 web barter dollars; and one order with 1share of IBM stock as the residual amount. In another example, if thesystem 100 chose to break down into a specific quantity amount in thesecurity “stock”, the system 100 may decide to break down posted ordersto allotments of 100 shares and post the remaining portion (if any) thatisn't dividable by 100. For example, if the posted order was 1220shares, the system 100 can re-post to be 13 barter orders: (12) barterorders with 100 shares and (1) barter order with 20 shares. Further, ifthe system 100 wanted all residual amount(s) to be a specific figure,the system 100 can require the balance of the security plus web barterdollars to always be a specific value. The purpose is to simplify thebarter values to be essentially equal to a common value or multiplecommon values in the system 100 to facilitate more barter transactions.

As a “virtual stock market”, the system may allow all securities to bein decimal format or dividable by 100, 1000 etc. This means that even aHimmelstein Option (no matter the security stated in the HimmelsteinOption) can be in decimal format or dividable by 100, 1000 etc.Therefore 1.00=1 total unit of the particular security. For instance ifthe security is stock, 1.00 would equal one share of stock for aparticular company.

Therefore, any fractional or decimal amount created from a bartertransaction can be worth for example, as little as 0.001 of a web barterdollar or 0.001 of a U.S. dollar. Specifically, if Individual “A” posteda barter order to barter away 100 shares of AOL stock at $85.00 pershare while desiring IBM shares at $180 per share, the system may, (ifan available match existed or if it was a direct barter with thewebsite) complete the barter order and provide 47.22 IBM shares at$180.00 per share. In this case, decimal amount of 0.22 is worth $39.60,if $180 is the current stock trading price per share. Alternatively, thesystem/barterer may allow, depending on the parameters set, barter 99.53shares of AOL stock for 47 shares of IBM stock.

The system can state in all barter agreements (i.e. terms andconditions) that all parties using the system may accumulate“fractional” or “decimal” amounts (i.e. all values less than (1.00)total unit of a particular security) from different parties and upon thesum equaling 1.00, allow the sum to become 1 unit of a security, such as1 share of stock. It should be noted that for Himmelstein Options, thesystem would be required to ensure the latest before dates and latestafter dates overlap, and the system would restate the before date andafter date to be the latest before date and earliest after date of allthe fractional or decimal amounts.

Preferably, the system maintains a history knowing which fractional ordecimal amount came from which security, such as stock, and can, whenbeneficial to the system and/or the barterer, reseparate a unit of aparticular security and rematch it back together with a portion of theoriginal security that had been part of the actually split. If for aHimmelstein Option, this may change the range of settlement dates.

Optimally, the system may allow barterers to barter fractional ordecimal amounts to other barterers and/or only with the system.

The system 100 may set the standard for minimum transaction and maximumtransaction based upon various concerns, including but not limited to,profitability and or irregularities, illegal trade practices and illegaltrade patterns.

The methodology of the “standard” Himmelstein Option is to allow two ormore parties to agree at a future date to barter, exchange or sell itemsor securities based on current agreed values, regardless of the tradingvalues of the securities at the time of settlement. In an alternativeembodiment, two or more parties may agree to exchange or barter at afuture date based on values on that future date. In this embodiment, thesettlement date or dates for each security may yet be a different date.

The system may unilaterally determine, or give each individual barterer,the ability to select a closing price for securities as trading days getlonger with extended after-hours trading. For example, if a security wasstock, the system may permit an individual to choose the traditional4:00 P.M. eastern/standard time closing price of the NYSE and the NASDAQmarket. On the other hand, the system or individual may choose the valuebased on after-hours trading. For example with the security, stock, orHimmelstein Option for stock, the system uses the closing price as thecurrent stock trading price as noted on 538, FIGS. 5D and 506, FIG. 5A.

The system 100 can operate 24 hours a day or during standard markethours and/or during predefined after hours trading or a combinationthereof. The system 100 can further allow specific securities to betraded/bartered during specific time frames or allow a barterer tochoose the hours during which the barterer wants their barter orderposted (i.e. available for barter). Furthermore, the barterer or thesystem may allow the after hours trading market to operate totallyindependent from the standard market hours session. It may be aselectable parameter by either the barterer or system to determinewhether a barter order posted during standard hours will participate inthe after trading sessions and vice versa. Also, the barterer or systemcan determine if un-executed barter posted orders placed in either thestandard or after hours session carries over to the other session orgets canceled.

The system can ensure that barterers remain anonymous from one anotherand may utilize trustees, assignors or intermediaries to accomplishsuch.

The system can also allow any barter order to be canceled under specificterms. Further, if the order was not “locked” by a barterer or alreadyprocessed, the system can permit an individual who created the barterorder to cancel or modify same.

The system can also utilize the latest security features and encryptionmethods available.

The system may permit an individual to post a barter order with a rangeof quantities acceptable to the individual. For example, if theindividual posted IBM stock with a range of 5-10 shares, this means thatthe system can accept a barter order for any quantity between 5-10shares. This increases the likelihood of the barter transactionoccurring. As will be recognized by those skilled in the art, the feestructure charged by the system may be modified to handle thisembodiment.

The system 100 can also conduct or perform auctions wherein the system100 can further require: 1) a bidder to bid with a specific security; 2)a bidder to bid with a specific list of securities pre-approved; 3)require various conditions on a bidder such as requiring security to beheld by the system/designated agent; 4) pre-approve an individual to bidand 5) Minimum bid requirements may exist. The system 100 may use theembodiment that allows “offers” and allows communications betweenpotential barterers using the system's e-mail subsystem.

An agreement for a Himmelstein Option can state various additionalconditions such as requiring that the barterer in possession of or inownership of a Himmelstein Option must first offer or sell same to thesystem 100 and/or owner of the security prior to going to settlement.The system may allow a barterer creating Himmelstein Options the abilityto draft specific conditions to essentially create a custom contract tomeet the barterer's needs.

If the system 100 utilizes an intermediary or designated agent, thesystem 100 has the ability to fully communicate in such fashion toensure that all securities are transferred back and forth in a propercontrolled and secure fashion.

The system can authorize and permit an individual to access theebarterrealestate.com system and utilize an intermediary, or directlybarter for real estate.

Referring now to FIG. 8, the posted barter order database module 116stores posted barter orders 806, provides access routines 802 andperforms maintenance of the database 804. Among the access routines 802are add order record, delete order record and get order record.

The add order routine generates a database record that comprises thebarter order in addition to a unique transaction number, the time anddate stamp of the order and the account number. There are numerousdelete routines to remove posted barter orders based on differentcriteria. Some of the criteria are account number, transaction number,time and date, and barter item. Similarly, the get routine can returnrecords based on the same criteria.

The maintenance program 804 executes periodically, or optionally at therequest of and access routine 802, to remove and modify posted barterorders. For example, orders may be modified if a stock split occurs andthe barter order designates this stock or a Himmelstein Option for thestock. Orders can be removed for a number of reasons such as the barterorder expires, the barter account closes or the barter item is no longeravailable. For example, a barter order can be removed if stock tradingis halted and the barter order designates this stock.

Barter orders are modified by the maintenance program 804 under a numberof circumstances. A stock symbol designated in an order may have changedor the account number of the barter order is changed. Optionally,maintenance program 804 generates indexes and tables to facilitate quickaccess to the database records.

Referring to FIG. 10, an alternative embodiment of the present inventioncomprising a real estate barter system 1100 is illustrated whichutilizes a computer-based website that may effectuate a tax-freeexchange or tax deferred exchange for swapping barter items includingany type of real estate. Real estate as defined herein includesownership in real estate and leases of real estate. Barter items aredefined as including, but not limited to, real estate, leases of realestate, stock, cash (foreign or domestic currencies), web barterdollars, Himmelstein Options, CD's, bonds, notes, Option Put, OptionCall, Commodities/Futures, Annuities, Muni Bond(s), Government Bonds,Funds, Strips (Zero Coupon Treasuries), Ginnie Mae(s), Fannie Mae(s),Freddie Mac(s), UIT (Unit Investment Trust), T-bills and any futurecreated or defined security, commodity or commodity money. Barteringdifferent categories of items is supported by the system 1100. Forexample, real estate can be bartered for other real estate orsecurities, such as stocks or bonds. The system 1100 provides for itsown “web-barter dollars” which may be accumulated or traded by barterersusing the system 1100 and are particularly useful in facilitatingbarters where items of unequal value are traded.

The system 1100 includes a barter website 1106 which is accessed via areal estate company website 1102 or directly via the Internet using acomputer such as a personal computer 1114 or a wireless hand-heldcomputer with Internet connectivity 1110. Optionally, the system 1100may be incorporated as part of an existing real estate company'swebsite.

In the case of access via a real estate company website 1102, thebarterer uses a computer such as a personal computer 1108, a portablecomputer 1117 or a wireless hand-held computer with Internet capability112 to select a “Barter” icon 1103 that incorporates a link 1104 to thebarter website 1106. Once the icon 1103 is selected, thebarterer's_account information is transferred via a link 1104 to thebarter website 1106. In this manner, the barter website 1106 is providedwith all of the relevant particulars of each item owned by theindividual barterer. For example, in the case of real estate, thewebsite 1106 preferably includes the address, tax information, officialappraised value, assessed value and information regarding the property'sphysical features and amenities. In the case of stocks, the barterwebsite 1106 preferably includes data indicating issuing company, numberof shares, market value and whether dividends are reinvested. Using thelink 1104, the barter website 1106 is transparent to a bartereraccessing it via the real estate company website 1102.

The system 1100 can be further interfaced with traditional real estatebrokers and stock brokers so traditional brokers and clients without theresources to go directly “online” can barter in the same manner.

While the barter system 1100 supports bartering of a large array ofitems as disclosed hereinbefore, an online real estate company hostingthe “Barter” icon 1103 can limit barters to certain categories of items.For example, a real estate company website 1102 that provides onlinereal estate trading may chose to limit the barter website 1106 totransactions involving only real estate or leases for real estate.Preferably, the use of stock, web-barter dollars and/or cash is alsopermitted by the real estate company website 1102 which enables a widerrange of barter orders to be matched and barter transactions to becompleted.

Regardless of the items bartered, the barter website 1106 comprisesthree main components: 1) a barter ordering module 1105; 2) a postedbarter order database module 1116; and 3) a barter matching engine 1118.Optionally, the system 1100 may include a separate database (not shown)of each individual's barter items portfolio including all real estateholdings. In general, the barter ordering module 1105 permits a trader,herein referred to as the barterer, to create a barter order thatincludes the item to be traded, the item desired and additionalparameters related to the barter order.

The table set forth in FIG. 11AA and FIG. 11AB reflects typicalparameters associated with various classes of barter items includingreal estate or securities to be identified in a barter order. In eachbarter order, the appropriate parameters are identified for both theitem to be traded and the item to be acquired so that the barter ordercomprises two sets of item parameters. The two sets of parameters may bequite different where the two items which are the subject of the barterorder are of a different class or type. Each portfolio item, regardlessof type or classes, can be transformed into a Himmelstein Optionagreement by defining a future date or range of dates for settlementusing the last column in the table FIG. 11AB.

When an individual creates a barter order for real estate or any typesecurity, the system 1100 produces an Agreement of Barter, Exchange,Sale or Lease which sets forth the detailed terms and conditions.Barterers, in essence, fill in the blanks of the Agreement of Barter,Exchange or Sale. For real estate, these Agreements will be similar inform and scope to current real estate Agreements. The system 1100 mayalso require electronic signatures to accompany the Agreement or maycreate a parallel Agreement for each barterer for simplicity andanonymity purposes. The Agreement also includes the system 1100 as aparty, providing various conditions or rights that the system 1100,intermediary or designated agent(s) has with the barterer.

At settlement, title to the real estate, security or financial interestis transferred. For real estate, for example, settlement may require theactual transference of the deed to the real property. Preferably, a newtype of “electronic deed”, similar to a stock transaction, is used sothat a paper deed is not required and a book entry of the real estatetransfer may be made to transfer title.

When the barterer creates a barter order, the system 1100 creates anorder number referencing the barter order. The system 1100 may randomlycreate or code barter order numbers so only the system 1100 is aware ofthe age of a barter order and the identity of the barterer. The postedbarter order database module 1116 accumulates posted barter orders andincludes the software to add, delete and maintain the data in thedatabase. The barter matching engine 1118 selectively matches abarterer's barter order with posted barter orders in the database 1116.Posted barter orders “matching” a barterer's order are displayed suchthat the barterer can select a candidate or multiple candidates from thedisplayed listing of matching posted orders.

The matching process functionally operates as a filter to display postedorders matching a selected criteria. Preferably, the filter is definedby the barterer and sets forth the parameters which are required, (suchas the price and type of property), and the parameters which areoptional. An example of an optional parameter for a real estate bartermay be the number of bedrooms. The barterer may set the number ofbedrooms to six (6), but the barterer would accept a barter with aslittle as four (4) bedrooms. A detailed parameter listing forresidential real estate is shown in FIG. 11C. As shown, the parametersfor real estate may be very detailed regarding the physical features ofthe dwelling and the grounds. The barter may specify which of theparameters are required and may set a range for the parameters such asnumber of bedrooms, number of bathrooms or total square footage of thedwelling or the lot. The barter may also specify “other” commentsregarding each feature, such as the furnace being preferably a Lennoxfurnace.

The system 1100 then attempts to match the barterer's selected item tobe acquired with posted orders having the same item to be bartered. Theprice of the selected item may also be used for filtering to require adirect quantity match or a match within a quantity range. The barterer'sselected item to be bartered is also a preferred criteria for thematching filter, so that postings are displayed of barter orders whichseek to acquire the item selected to be bartered by the barterer. Apreferred filter includes both the barterer's selected item to bebartered and selected item to be acquired. Thus, where a barterer'sdesired item is real estate, (a single family dwelling in a particulargeographical area), posted barter orders seeking to barter away realestate comprising single family dwellings in said geographical area aredisplayed as matches. Other matches may require lake front, river front,waterfront, lagoon front, bay front, beach front, etc. These parametersmay be listed in the parameter list under “other”.

The barter matching engine 1118 attempts to match one “closest” postedbarter order or multiple posted orders with the barterer's order. Thebarter engine 1118 can also be configured to use the barter website (oran entity chosen by the website) as an intermediary as explained ingreater detail below.

FIG. 12A illustrates a barter item database 1202 having a plurality ofsample posted barter orders 1204-1222 stored in module 1116 and FIG. 12Billustrates a sample barter order 1226. In this example, the barterorder 1226 includes the real estate to be bartered indicated by the typeof property 1228, the location 1230 of the property to be bartered,(preferably including more detail such as county, city and address), theasking price 1232 at which the barterer is willing to barter and severalof the parameters 1233, 1235. The information regarding the property tobe acquired preferably includes the type of property 1234, the location1236, the value 1238 the barterer is willing to barter for the desiredproperty and several of the parameters 1240, 1242. Equity in/out 1244 isprovided for the entire barter order 1226. It should also be noted thatthe barter order format may change depending upon the type of item to bebartered. For example, fields 1229 and 1231 were filled in by the barteras “R” to indicate real estate. If “S” for stock were input by thebarterer, these fields 1229, 1231 would change according to theparticulars of stocks. The same coding can be used for each type ofbarter item shown in FIGS. 11AA and 11AB.

Although the barter order example shown in FIG. 12B includes a fixedvalue, this value need not be fixed. For example, if the bartererdesires to barter a single family dwelling in New Jersey for a certainnumber of shares of IBM stock, the price of the IBM stock may fluctuatebefore settlement. Accordingly, the barterer depending on how the barterwas entered, may agree to accept a lower value if the IBM stockdecreases in value or may require a larger number of shares in order toequalize the value to the asking price 1232. Of course, the otherbarterer must preagree to this equalization at the time the bartercontract is consumated. Optionally, the system 1100 may change a fee tocollar a particular security to ensure that said security holdingsmaintain a specific value. Barterer order 1226 indicates that thebarterer has real estate 1229, a single family dwelling 1228 located inNew Jersey 1230, having an asking price 1232 of $298,000 which thebarterer is willing to trade at a value 1238 of $323,000 for other realestate 1231, comprising a single family dwelling 1234 located in NewJersey 1236. The barterer has also agreed to pay $25,000 cash or anequivalent amount of stock to close the transaction. If the matchingcriteria is set to match only the barterer's desired item within aspecified range which, for example, may be 10% in this case, orders 1210and 1222 are displayed. If the matching criteria is set to match onlythe barterer's barter item selection, orders 1206 and 1208 aredisplayed. If the matching criteria is set to match either thebarterer's barter or acquire item selection, orders 1206, 1208, 1210 and1222 are displayed.

FIG. 13 illustrates a multi-order barter selection 1300 having first1302, second 1308, third 1314 and fourth 1320 barter orders according tothe present invention. Multi-order barter selection may be used eitherin order to find all potential available barters among the posted barterorders. In this example, the barter engine 1118 cannot fulfill the firstbarter order 1302 with a single one of the other barter orders 1308,1314 or 1320. The first barter order 1302 barters a single familydwelling in New Jersey 1304 for a multiple family dwelling in New Jersey1306. For ease of explanation, the following abbreviations are usedthroughout this specification: SFD—single family dwelling; MFD—multiplefamily dwelling; COM—commercial property; LAND—undeveloped property. Ofcourse, the two-letter state abbreviations are also used.

None of the other posted database orders barter MFDNJ for SFDNJ, butbarter order 1302 can be fulfilled if intermediate barters are matched.The barter matching engine 1118 matches intermediate barters usingseveral methods. In one embodiment, barter matching engine 1118 searchesfor a posted barter order having a desired real property that matchesthe barterer's real property to be traded. Since posted barter order1320 lists SFDNJ as the desired real property 1324 and the first barterorder 1302 real property to be bartered is SFDNJ 1304, the bartermatching engine 1118 match for the first half of the first barter 1302has been satisfied. However, the barter matching engine must find amatch for the desired real property 1306 for the first barter order 1302and must also find a match for the first half 1322 of the third barterorder 1320. Accordingly, the barter matching engine must find atransaction that satisfies the desired COMNJ 1322 of the third barterorder 1320.

The barter matching engine 1118 searches for an order that trades COMNJfor MFDNJ in order to make a two posted order barter transaction.However, in the example, there is no posted order that trades these tworeal properties, so the barter matching engine 1118 locates barter order1308 that trades SFDPA 1310 for COMNJ 1312. The barter matching engine1118 then searches for another posted barter order that trades MFDNJ forSFDPA to find a transaction candidate. Barter order 1314 meets thiscriteria in that MFDNJ 1316 is traded for SFDPA 1318. Accordingly,barterer order 1302 can be satisfied through posted barter orders 1320,1308 and 1314. In a preferred embodiment so as to make the multi-ordertransactions transparent to the barterer, barter matching engine 1118displays multi-order barters as a single “phantom” posted barter order.The matching engine 1118 creates a transaction and displays this phantombarter order in the list of matching barter candidates. The barterersimply selects the phantom barter order to finalize the multi-orderbarter transaction. In these examples, it is assumed that the values andother parameters set by the barterers permit all barter orders to occur.

In another method for locating multi-order barters, barter matchingengine 1118 begins by searching for the barterer's desired real property1306 first. Barter engine locates barter order 1314 that trades MFDNJ1316 for SFDPA 1318. Continuing in this manner, the engine locates thesame posted barter orders as above, but in the reverse order. Ingeneral, the engine 1118 attempts to link multiple barter orders. One ofordinary skill in the art of software programming appreciates that arecursive algorithm is well suited for generation of such a linked list.If a transaction can be automatically processed, the system 1100 can tryto match the most number of barterers involved or the greatest amount ofmoney involved without adversely effecting other transactions.

The operation of barter ordering module 1105 allows the barterer toenter the barter order. In one embodiment of the present invention, thebarterer selects minimum barter order parameters such as the type ofreal property (i.e., SFD, MFD, COM, LAND), price desired, price paid,number of total rooms, number of bedrooms, etc. Of course, one shouldrealize that with real property, particularly dwellings, there are avast number of parameters that can be utilized to specify real propertyas shown in FIG. 11C. If the barter item is a security, the specificstock, quantity and value price of the security to be bartered inaddition to the desired security and value price for the securitydesired. Once these minimum parameters are selected, other parametersare set to default settings determined by barter ordering module 1105.

Barter orders may be created for real estate barters as the “trade for”side, the “trade away” side and both as illustrated in flowcharts FIGS.14A-14E and the screen displays of FIGS. 15A-15F, where the barterer isprompted through each step of the barter order creation process. Forbartering other securities or financial interests with real estate, thebartering steps and screen displays are modified to preferablyaccommodate all of the parameters for the classes of items identified inFIGS. 11AA, 11AB, 11BA and 11BB.

The example shown in FIGS. 14A-E and 15A-F is directed to bartering ofreal estate and securities. In this example, the barter website 1106 isaccessed via an online real estate company that permits bartering ofreal estate, stocks, cash, web barter dollars and combinations thereof.The flowchart of FIG. 14A begins after the trader selects the “Barter”icon 1103. Accordingly, barter ordering module 1105 has received fromthe online real estate website a barterer's current real estateportfolio. If desired, the barterer may also forward informationregarding the barterer's securities, such as stocks, bonds, etc. Thereal estate and the securities will be referred to hereinafter as“barter items”. If the barter item is a security, the quantity and otherspecifics of these securities are also provided via link 1104. If thebarter item is real estate, various detailed particulars are alsoprovided including, but not limited to, location of property, map toproperty, assessed value of property, equalization ratio and appraisals,etc. or the parameters set forth in FIG. 11C. At step 1402 of FIG. 14A,the website displays all of the barter items available for barter. Instep 1404, the barterer selects from the displayed items in step 1402.

In the embodiment of FIG. 15A, a symbol 1502 representing a selection ofthe barterer's portfolio of real estate, stocks, web barter dollars andcash is displayed. The barterer selects the downward triangle 1501, todisplay all available barter items as shown in 1503.

The system preferably further indicates if the barterer's security orreal estate is currently included in a posted barter order, therebyrequiring the barterer to cancel said posted barter order prior toselecting the security or real estate for a new barter order.Optionally, an alphabetical list of geographical locations (for realestate) and company or stock symbols (for securities) is displayed foralphabetical searching. The portfolio quantity 1504 of the barter itemis also displayed, if applicable. The barterer may enter the selecteditem 1502 by typing it in. Preferably when the barterer begins typingthe geographical location of the real estate, the barter ordering module1105 locates the first listed item that matches the entered characters.Alternatively, the portfolio is displayed for selection via an array ofpull-down menus 1507, each displaying one class of the items of thebarterer's portfolio.

Once the barterer locates and selects the item to be traded, the totalquantity of the selected item in the barterer's portfolio isautomatically displayed in step 1406 of FIG. 14A as the quantity to bebartered. At step 1408, the barterer can modify the quantity to bebartered 1410, (this is not applicable to real estate). As shown in FIG.15A, the quantity 1504 can be modified via selection of the directionalarrows 1505 or the barterer can enter a new quantity value. In eithercase, in this embodiment the barter order module 1105 does not allow aquantity value that exceeds the quantity owned by the barterer.Alternatively, the system 1100 may be configured to permit the bartererto select a range of quantities to be bartered.

Preferably, the barter ordering module 1105 has access to trading pricesfor stocks at step 1412 of FIG. 14A, so that the trading price of theselected stock is displayed along with the time and date of the tradingprice as illustrated in display section 1506 of FIG. 15A. The system mayprovide a range of values for the real estate based on various data,including, but not limited to, the assessed value, the equalizationratio, (if applicable), appraised value, (if any is available),comparable properties that have sold, comparable properties listed forsale and any other data available. A fixed per share value of the stock1508 of FIG. 15B is initially set to the trading price. If barterers aretrading away cash or web barter dollars, the system 1100 in thatinstance may rearrange the screens and prompt the security beingbartered for prior to prompting the cash or web barter dollars beingtraded away. As one skilled in the art will realize, the fields whichare not applicable to a particular barter item such as real estate, cashor web barter dollars are modified to properly reflect what is beingbartered. At step 1414 of FIG. 14A, the barterer can elect to trade atthe displayed trading price or select a new barter value 1416. As FIG.15B illustrates, the barterer can change the default fixed per sharevalue 1508 or select the value of the stock to be bartered based on thefluctuating stock trading price by selecting block 1510.

Preferably, the barter value is based upon the asking price of the realestate. Optionally, the system 1100 may determine a “market value” basedupon new methods or procedures. The barterer can then select a range(i.e. plus or minus a certain value or percentage), in step 1416 in FIG.14A and at step 1511 in FIG. 15B or if the barter item is a security,the barter value can fluctuate based on the current trading price. Thebarterer selects this range as illustrated in FIG. 15B at 1512, 1518.

The range can be a value amount 1514, 1517 or a percentage of thefluctuating trading price 1516, 1519. By selecting boxes 1512 or 1518,the barterer selects whether the range is added to or subtracted fromthe fluctuating value. For example, if the range was set to plus 1percent at step 1416 (by selecting box 1512 and entering 1% in box 1516)and the asking price for the real estate to be bartered at the time ofthe barter transaction was $800,000, a posted barter order with a valueprice between $800,000 and $808,000 would match the barterer's order.Likewise, a barterer may enter minus 9 percent of the asking price bychecking box 1518 and entering 9% at box 1519 so that a posted barterorder with a value price between $728,000 and $800,000 would match thebarterer's order.

Once the value of the item to be bartered is selected in step 1416 ofFIG. 14A, the barter ordering module displays at step 1418 of FIG. 14Bthe total barter amount and the percentage or dollar amount of the valueprice in relation to the asking price in FIG. 15B, at 1520. Should arange of value price be selected, the display 1520 is modified toreflect such. In the example of FIG. 15B, the barterer can change thebarter value 1520 by clicking on a “change” icon 1522 and going throughthe appropriate steps or accept the value 1520 by clicking on a“continue” icon 1523. This is also shown at step 1420 of FIG. 14B.

At step 1422 of FIG. 14B, barter order fee amounts are displayed. Feeamounts, as illustrated in sample screen display lines 1524 and 1526 ofFIG. 15C, are determined based on whether the barter order is to beposted to the barter order database 1524 or the barter should occur withthe barter website directly 1526.

At step 1424 of FIG. 14B, the barterer selects the time in which thebarter order is valid. Although there are many choices, as illustratedin FIG. 15C, the only timing option 1528 that is available for a realestate barter is for the barterer to set a specific date for settlement.

At step 1426 of FIG. 14B, the barterer may select special conditionalparameters if applicable. The available special conditions are notapplicable to a real estate barter. At step 1531, FIG. 15C the barterermay enter a subsequent amount of the security or a different security tobe provided at settlement. As hereinbefore described, the system canprompt barterer to include minimum criteria to clearly identify thesecurity and the value. At step 1428 of FIG. 14B, if the desiredsecurity is stock, the barterer selects between three choices for thedesired stock with respect to a dividend reinvestment option.Accordingly, the barterer chooses between: 1) the stock must have adividend reinvestment program; 2) the stock must not have a dividendreinvestment program; or 3) accept new stock with or without a dividendreinvestment program. In the embodiment illustrated in FIG. 15D, thebarterer selects the desired option by selecting the corresponding boxin section 1532.

At step 1429 of FIG. 14B, the barterer chooses the type of barter theywish to transact, (i.e. a direct barter only or permit the website toact as the barterer or use an intermediary if a direct barter is notavailable). The barterer can request a direct barter with an order fromthe posted barter database at a first fee rate, or in the alternativefor a second fee rate, the barterer can request the website to be thebarterer. The first and second fee rates may be the same or changeindependent of each other. At times to promote automated websitebartering, depending on the securities to be bartered, the second feerate may be set at a relatively low rate, or it may be set to a premiumrate for the automated service. According to the embodiment illustratedin FIG. 15D, the barterer selects the type of transaction in section1534.

Following the selection of barter type, step 1429, posted barter ordersmay optionally be displayed 1430 based on matches of posted order “to beacquired” items with the barterer's “to be bartered item.” In the caseof a direct barter, a trade can be displayed immediately if a match isfound in the database, or the barterer can complete and post the orderto the database and await a match from a subsequent barterer. In thecase of a barter with the website, the transaction is displayedimmediately provided the website can buy or obtain the real estate,stock, web barter dollars or cash desired by the barterer. Here, thewebsite uses a predetermined formula, including taking into account therelationship with the barterer to calculate the fee for this type oftransaction.

The barterer selects the desired real estate, stock, web barter dollarsor cash price to acquire for the barter order at step 1431 of FIG. 14B.If the barterer's desired item is real estate, stock, web barter dollarsor cash, the barterer checks the appropriate box in display 1537 asillustrated in FIG. 15D. This changes the configuration of fields in1535, 1536. Accordingly, if a stock is to be bartered and is selected infield 1537, the fields 1535, 1536 will change to reflect such, wherebystock symbols 1535 are displayed upon selection of a down arrow. Thebarterer can select from a list of industries 1536 wherein the stocksymbols 1535 are filtered to list only those related to the selectedindustry.

If the barter item is real estate as selected in field 1537, thebarterer can select from a list of cities, towns or municipalities to beshown in field 1535 and states to be shown in field 1536. This permitsthe barter to narrow the range of properties for which the bartererwould like to trade.

If the barterer chooses a stock by selecting it, the system 1100displays the symbol 1535 pertaining to the chosen company. Next, in step1432 of FIG. 14C the barter ordering module informs the barterer of theavailable stock trading price of the desired stock, along with thecurrent date and time. One method of displaying the price is illustratedin FIG. 15D at section 1538.

The barter value of the desired item defaults to the available stocktrading price (if a security) at section 1540 of the display of FIG.15E. The barterer can accept the displayed value at step 1434 or selecta new value at step 1436 of FIG. 14C. In the display of FIG. 15E, thedesired value for the barter item is selected. The barterer can select afixed value using box 1540, a value plus or minus a fixed amount similarto step 1511, as shown in FIG. 15B or a fluctuating value range insection 1541 in a manner as described in connection with 1510-1519 ofFIG. 15B. Thereafter, as indicated in the flowchart of FIG. 14C at step1438, the total desired barter amount and percentage or dollar amount tothe price is displayed as illustrated in sample display 1542 of FIG.15F. At step 1440 of FIG. 14C, the barterer can change the barter valueof the desired item which steps can be implemented by clicking the“change” icon of display section 1542 of FIG. 15F.

-   -   At step 1442 of FIG. 14C, the present invention assists the        barterer in determining whether the barter order is financially        advantageous to the barterer. As hereinbefore described, the        Himmelstein Value Ratios are provided to assist the barterer.        Since the present embodiment includes bartering of real estate,        the variables are redefined as follows: a=asking price for real        estate or security desired to trade away    -   b=system's estimated real estate price (i.e. appraised value or        asking price) or current security trading price desired to trade        away    -   x=asking price for real estate or security desired to obtain    -   y=system's estimated real estate price (i.e. appraised value) or        current security trading price for security desired to obtain        In the embodiment illustrated in FIG. 15F at section 1544, the        barter ordering module selects the specific formula and the        Himmelstein Value Ratio is displayed. The barterer may then        change the barter order per step 1444 by selecting a change icon        in section 1544 of the display FIG. 15F.        What follows is an example related to the bartering of real        estate:

a=$500,000=real estate

b=$475,000=appraisal of real estate

x=10,000 shares @ $50 per share of home depot stock

y=10,000 shares @ $52 per share of home depot

If there is no appraisal—a and b are equal and system can notify barteras such. For example, using Value Ratio 2, the result is 1.094. In otherwords, the barterer trading away the real estate will gain 9.4%. In anactual dollar amount, the gain is $45,000.

Referring to FIG. 14D at step 1446, the barterer can review the barterorder prior to submission of the order to the barter matching engine. Asillustrated in the embodiment of FIG. 15F the barter order module listsat section 1546 the terms and conditions before the barterer submits theorder by clicking an appropriate icon 1548. With respect to a realestate sale or lease, the system can submit an Agreement of Sale orLease that is binding and meets current state laws for the particulartransaction including all contingent agreements. The barterer may choosevarious options provided such as home, engineers, bulkhead or termiteinspections. Alternatively, the barterer may decide to terminate thebarter order creation by clicking a “QUIT” icon 1549.

Once the order is submitted by the barterer at step 1448 of FIG. 14D,the matching engine searches the website database for a barter order orin an embodiment where the engine matches multi-order barters, multiplebarter orders to satisfy the submitted order. If no match is found atstep 1450, the barter matching engine determines whether the ordershould be posted to the database 1452 based on the timing selected atstep 1424 of FIG. 14B. If the order should be posted, the barter orderdatabase module 1116 posts the order to the database 1116.

After the barterer clicks on the “continue/agree” icon 1548, (anddepending on the timing chosen), the system 1100 in accordance with FIG.14D posts the barter as an available transaction 1452, 1456 and/or findsand displays “matching” posted barter orders 1450, 1454 via the screendisplay illustrated in FIG. 16. The “matching” in the preferredembodiment includes matching the barterer's desired item and barteritems with the barter and desired items of single or multiplecombinations of posted barter orders. The matching barter item includesthe transaction number 1560, the asking price 1562, the type ofownership 1564 (i.e., sale or rental), and the address 1566. Thebarterer may also take a virtual tour by clicking on the Virtual Touricon 1568 or may make a counter offer by selecting the Make Offer icon1570.

If any one of the available barter orders requires the price tofluctuate with the stock market, the display is preferably continuallyupdated so that the prices reflect market value as close to real time aspossible if one of the barterers are countering with stock. The screenalso displays the order number, symbol, share price, ratio to stocktrading price, Value Ratio, number of shares, barter amount, barterprice fluctuation with stock trading price, special conditions, timing,and dividend reinvestment criteria.

If the individual decides that they are willing to barter away some orall of their selected real estate portfolio for one or more barterorders listed, they select to do so 1458, of FIG. 14D (or as long asthey have more barter amount available) by simply clicking on eachorder, (i.e. choosing first preference then second preference, and soon) or the Make Offer icon 1570. Each time an order is chosen, thesystem 1100 permits/requires the individual to revise their originalasking price for the real estate they desire to trade away in thebarter, thereby requiring the individual to accept the real estate orthe amount of stock received in return from the barter order that theyhad selected. When a posted order is chosen, the system 1100 enters thecorresponding information in a table on the screen to notify theindividual of the transaction number, and other relevant information asshown in FIG. 16.

If user clicks on “transaction#/mls#”, another screen appears which canshow a picture of the property along with basic information shown inFIG. 11C including the number of bedrooms, bathrooms, the taxes, lotsize, block number, lot number, zone, type, map, listing number, etc. Inaddition, there can be remarks written about the property, by the owner(i.e. seller) or by the website.

If user clicks on the Make Offer icon, the system provides the userlimited pertinent blanks in the Agreement, to be filled in by thebarterer, such as the buyers name (please note system may enter thisautomatically if all users are pre-screened before using the system);purchase price including type of security or financial interest;breakdown of payment of purchase price; mortgage contingency amount;type of mortgage including other particulars such as interest rate,length of mortgage, and points; time and place of closing; type of deed;personal property to be included; commission clause should either partyhire an agent and various other particular items that maybe importantfrom state to state or country to country.

The “seller” may counter the “buyer” agreement using the same agreementand making changes to it and returning it via the email system to the“buyer”. Preferably, the system highlights any changes in differentcolor each time so that both the seller and the buyer can recognizewhich changes were made on which counter offer date.

Additionally, when a barter order is chosen, the system 1100 “locks” thebarter order, including the price, to the individual for a predeterminedduration. A display of the time remaining to complete the transactionappears in a “time remaining” display box 1626. Should the time expire,the system 1100 provides two options: 1) finalize transaction; 2) orlose transaction in “X” seconds, with seconds decrementing on screen.The system 1100 may, if desired, inform the individual that someone elseis looking at the same barter order and may inform other users thatthere are pending barter orders which may come available.

Upon the individual reviewing available barter orders and deciding whatthey want to do, (i.e. accept one or more orders or none), they proceedby choosing one of the following four icons 1631-1634: 1) clear; 2)change barter order; 3) finalize transaction; and 4) finalizetransaction but display more barter options. Each option leads to thedisplay of additional screens to complete the selected task as indicatedin FIG. 14E.

The system 1100 exhibits other special conditions such as if the valueof a security falls, the system 1100 may require barterers to bartersome or all of a security or real estate back; an election to requirethat the Value Ratio must stay within a specified range for a specifiedtime or trigger an action by the system 1100 such as a penalty, orforcing the individuals to switch some or all the real estate andsecurity back, etc.; and the entry of multiple securities or symbols,and corresponding value prices, and permit the system 1100 toautomatically take the best Value Ratio as long as Value Ratio is over aspecific number (i.e. such as 1.00) set by the barterer and the system1100 automatically completes the transaction if posted barter ordersexist meeting that criteria.

The system 1100 may be programmed to automatically purchase securitywithin a predetermined value range when a barter order is posted ormarket values change, complete a barter transaction for the barter orderand sell the acquired security while charging an appropriate fee. Thesystem 1100 may act as a negotiator between barterers, sending each ane-mail or otherwise notifying them when the search engine discoverspotential matches among barter orders. The system 1100 may permit accessby individual barterers to the identity of barterers who have posted“matching” barter orders to allow them to negotiate directly betweenthemselves through e-mail or otherwise. The system 1100 may requiree-mail sent through it to purge “identity” (i.e. ensure anonymity). Thesystem 1100 may create an e-mail subsystem allowing individualsinteresting in bartering to enter limited pertinent information into theblanks of the agreement being presented to one another only identifyingthe individuals by the order number or transaction number that wascreated by the system 1100 when it originally posted the barter order.This is referred to as an “Make Offer”. The system 1100 may lock theindividual's real estate or security being offered for a specified timeallowing the individual receiving the offer time to accept, modify, orreject the offer. In other words, the individual making the offer cannotback out unless the person receiving it fails to respond within the timeframe, modifies it or rejects it. The system may act as an negotiatorbetween two individuals by calling or sending each of them e-mail in anattempt to get them to an agreed-upon barter amount or price.Alternatively, the system may permit the individuals involved tonegotiate directly between themselves or through the system over thetelephone or via email. In this manner, the system may coordinate andsetup appointments or teleconferences between all parties via e-mail,telephone or fax. The system may be also setup in a user friendly mannerto facilitate questions and answers about the property through e-mail,telephone or fax.

The system 1100 can also be configured for telephone access so that allfunctions that one may do online may be done over the telephone.Additionally, pre-approved individuals can be permitted to barter forreal estate and securities (which the website holds in escrow) prior tobartering their own securities.

In the generalized version of the barter system, various types ofbarters may be implemented as schematically illustrated in FIGS. 17Athrough 17E.

Referring to FIG. 17A, a two party exchange or direct barter isillustrated where Barterer “A” barters directly with Barterer “B” toeffect an exchange of properties; the “relinquished” property X and the“replacement” property Y respectively. For example, Barterer A posts aSFD in NJ “X” worth $850,000 for a MFD in NJ “Y” worth $800,000 plus$50,000 in cash. Barterer B accepts the barter effectuating an agreementto barter the properties and cash. Barterer A receives the MFD in NJplus $50,000 in cash from Barterer B and Barterer B receives the SFD inNJ and pays $50,000 in cash.

In this case, since the barter transaction was not an exact match invalue, the system 1100 balanced the barter transaction by allowingBarterer B to pay cash. The system 1100 may also permit balancing byproviding web barter dollars, or offering a different security, such asstocks or bonds to make up the monetary difference.

Referring to FIG. 17B, a two party exchange with an intermediary isillustrated. For example, Barterer A barters with Barterer B to tradeaway real property X and acquire security Y through an intermediary. Ifa match is located but the values are not equal, (for example if thesecurity of Barterer B has the greater value), the intermediary mayretain the excess security and supplement Barterer B, bartering away thegreater value security with cash, provide web barter dollars, adifferent security or acquire more of the desired security, (by firstacquiring such).

The intermediary either obtains additional cash or a security from theother barterer and/or from a third party (upon which the intermediaryreciprocates a security, cash, or web barter dollars). In anotherexample, using the same values above, Barterer A posts a SFD in NJ for$875,000. Barterer B has a MFD in NJ worth $500,000 and also hasMicrosoft stock worth $400,000. If Barterer A would not accept theproperty value difference in Microsoft stock, but would take AOL stock.The intermediary passes the property X to Barterer B, keeps the $400,000of Microsoft stock Y and forwards $375,000 of AOL stock W to Barterer A.

FIG. 17C illustrates a three party transaction with an intermediary.Barterer C barters away real estate Y to receive security X. Theintermediary, which may be the barter website, identifies barterers Aand B to complete the transaction. Barterer A barters security X forcash and Barterer B barters real estate Y for cash. The cash amounts mayor may not be equal, but barterers A, B and C may incur a service chargefrom the intermediary/website for the service provided. Additionally,the transactions need not occur at the same time. For example, theintermediary may complete the property transactions between barterers Aand C as first “leg” of the barter, and subsequently complete theremaining property and cash transactions between A and B as a second legof the barter.

In lieu of cash, web dollar credits are preferred where the website actsas intermediary. In another embodiment, the system 1100 may allow thebarterers to barter away their real estate, securities or financialinterests at a different time than when they receive a security orfinancial interest. This is a deferred exchange. It should be recognizedby those of skill in the art that any or all of the bartered items maybe real estate, securities or a combination of both. Additionally, theremay be different types of real estate or different types of securities.The system 1100 accepts all types of property for transfer andbartering.

FIG. 17D illustrates a three party transaction without an intermediary.In this example, Barterer A receives cash for real property X. BartererB receives real property X in exchange for security Y. Barterer Creceives security Y for the cash, which is forwarded to Barterer A.

Referring now to FIG. 18, the posted barter order database module 1116stores posted barter orders 1806, provides access routines 1802 andperforms maintenance of the database 1804. Among the access routines1802 are add order record, delete order record and get order record.

The add order routine generates a database record that comprises thebarter order in addition to a unique transaction number, the time anddate stamp of the order and the account number. There are numerousdelete routines to remove posted barter orders based on differentcriteria. Some of the criteria are account number, transaction number,time and date, and barter item. Similarly, the get routine can returnrecords based on the same criteria.

The maintenance program 1804 executes periodically, or optionally at therequest of and access routine 1802, to remove and modify posted barterorders. For example, orders may be modified if a stock split occurs.Orders can be removed for a number of reasons such as the barter orderexpires, the barter account closes or the barter item is no longeravailable. For example, a barter order can be removed if stock tradingis halted and the barter order designates this stock.

Barter orders are modified by the maintenance program 1804 under anumber of circumstances. A stock symbol designated in an order may havechanged or the account number of the barter order is changed.Optionally, maintenance program 1804 generates indexes and tables tofacilitate quick access to the database records.

Optionally, if the system 1100 included a separate database of eachindividual's portfolio for all securities, the system can performsimilar access routines and maintenance routines as described above.

After the system 1100 is activated, for an initial period there will beno fee charged in order to build a database of properties. Once it hasbeen deemed that the system has a substantial inventory of properties, amonthly and/or a flat fee can be charged in order to list a property onthe website. Additionally, a commission upon the transfer of aparticular property may be charged. The system can also charge one, orall parties for each transfer, depending upon how the parties would likethe transfer structured or how the operators of the website would liketo implement the fee structure.

One embodiment of the system permits an individual who posts theirproperty on the website for sale to withdraw the offer for sale prior tosettlement and change the offer to an offer to barter the property.Further, an individual can authorize the system to incorporate theircash or property into a new partnership that can invest in properties orcommodities. Accordingly, the system can create or interface with anentity that creates, partnerships that can permit individuals to receiveshares of a new partnership in exchange for their cash or property.Accordingly, the system can create partnerships that can utilize theexcess funds from multiple individuals where each individual can receivea portion (i.e. shares) of the new partnership. This may also benefitthe individual in that the IRS may deem this a non-taxable event.

The system ultimately can be the “national database” of commercial,residential and industrial property for sale or barter. Guidingindividuals through the entire process of the sale or exchange of realestate, the system permits users to interface with various entitiesinvolved in real estate transactions with electronic links from thewebsite 1102 including, but not limited to, the following:

-   -   a) mortgage companies;    -   b) real estate appraisers;    -   c) title insurance companies;    -   d) inspection companies including home, termite and engineer        inspections; and    -   e) attorneys.

The system also interfaces with other electronic systems to seemlesslyprovide information to barterers such as tax records, phone numbers,e-mail addresses and other information for a posted property andneighboring properties including, but not limited to, assessed value,last sale price, etc.

It should be recognized that due to the flexible nature of the system1100, there are several services the system 1100 can provide.Pre-approved individuals may be permitted to barter (which the web sitecan hold in escrow) prior to exchanging their own property.

Since the properties don't have to close at the same time, the system1100 can perform the transactions within the time limits set by the taxreform act of 1984, as amended. The system 1100 requires the taxpayer toidentify properties within the time frame allowed, which is currently 45days, and close on the replacement property within the time frameallowed, which is currently the earlier of: a) 180 days after thetransfer of the relinquished property; or b) the due date of thetaxpayer's federal income tax return (including extensions) for the yearin which the relinquished property is transferred.

The system 1100 may take an individualized specification for areplacement property desired by an individual, before or after anindividual exchanges their property, and continually update theindividual regarding the available properties about which the individualmay be interested. The specification includes geographical areas, typeof property and other factors which are used to determine the current“closest” available matches for a specific property. The specificationmay be created by email, telephone or when the individual accesses thewebsite. While on-line, the system may continually update the closestmatches, thereby permitting an individual to either ignore the matches,chose a match to look at or chose multiple matches to look at. Thesystem may also be set up to respond by telephone or email. The system1100 may automatically contact neighbors within a certain geographicalradius of a property that is being posted for sale or barter to notifythe neighbors.

In another embodiment, the system 1100 may act as an auction whereby aseller can choose whom they consider the highest bidder if offersinvolve different types of securities.

Although the invention has been described in part by making detailedreference to the preferred embodiment, such detail is intended to beinstructive rather than restrictive. It will be appreciated by thoseskilled in the art that many variations may be made in the structure andmode of operation without departing from the spirit and scope of theinvention as disclosed in the teachings herein.

1. (canceled)
 2. A computer-implemented method for exchanging a firstreal estate item for a second real estate item comprising: identifyingfor exchange a first real estate item owned by a first user; designatingcriteria associated with an exchange of the first real estate item for asecond real estate item owned by a second user; requesting a list ofreal estate items including the second real estate item, each realestate item in the list meeting the criteria associated with theexchange; selecting the second real estate item for exchange; andreceiving a confirmation of the exchange.
 3. A computer-implementedmethod for exchanging real estate items comprising: receiving anidentification of a first real estate item owned by a first user offeredfor exchange; receiving criteria associated with an exchange of thefirst real estate item for a second real estate item owned by a seconduser; generating a list of real estate items including the second realestate item, each barter item in the list meeting the criteriaassociated with the exchange; receiving a selection of the second realestate item for exchange; and transmitting a confirmation of theexchange to the first and second users.
 4. The method of claim 3 whereinthe second real estate item is a lease property.
 5. The method of claim3 wherein the criteria includes a value representing a number ofbedrooms associated with the first real estate item.
 6. The method ofclaim 3 wherein the criteria includes a value representing a number ofbedrooms associated with the second real estate item.
 7. The method ofclaim 3 wherein the criteria includes a date range within which thesecond real estate item is available for use.
 8. The method of claim 3wherein the criteria includes a range of credit available to be added tothe value of the first real estate item.
 9. The method of claim 3wherein the criteria includes a range of credit available to be added tothe value of the second real estate item.
 10. The method of claim 3wherein the criteria includes a location near which the second realestate item is located.
 11. The method of claim 3 further includingprocessing at least one fee associated with the exchange.
 12. The methodof claim 11 wherein the fee is a flat fee.
 13. The method of claim 11wherein the fee is an annual fee.
 14. The method of claim 11 wherein thefee is based on a value of the first real estate item.
 15. The method ofclaim 11 wherein the fee is based on a value of the second real estateitem.
 16. A computer-implemented method for exchanging a plurality ofreal estate items among a plurality of users, the method comprising:identifying for exchange the plurality of real estate items, each realestate item owned by a distinct user; identifying a first criteriaassociated with each real estate item; identifying a second criteriaassociated with each user; matching the first criteria with the secondcriteria to determine a plurality of exchanges; and transmittingconfirmation of the plurality of exchanges to each user.
 17. The methodof claim 16 wherein the step of transmitting includes: providing a userwith a list of available exchanges from which to select; and receiving aselection of at least one available exchange.
 18. The method of claim 16wherein the plurality of real estate items is more than two.
 19. Themethod of claim 16 wherein the second criteria includes a difference invalue between real estate items.
 20. The method of claim 16 wherein thestep of transmitting further includes transmitting a confirmation toeach user, each confirmation including information relating only to theassociated user.